MAA-AnnualReport2006 (3.2MB).pdf - Announcements ...

M A A H O L D I N G S B E R H A D • a n n u a l r e p o r t 2 0 0 6

2 Financial Highlights
4 MAA Regional Network
5 MAA Buildings
8 Board of Directors’ Profi le
14 Corporate Information
17 Notice of Annual General Meeting
20 Statement Accompanying Notice Of
Annual General Meeting
21 Penyata Pengerusi
28 Tinjauan Operasi Perniagaan
31 Chairman’s Statement
38 Business Operations Review
41 Appraisal Value On The Life Insurance Business
Of Malaysian Assurance Alliance Berhad
45 Statement On Corporate Governance
Contents
52 Risk Management
53 Other Bursa Securities Compliance Information
57 Statement Of Internal Control
58 Directors’ Responsibility Statement In Respect Of Annual Audited Accounts
59 Audit Committee Report
61 Corporate Social Responsibility
65 Directors’ Report
69 Statement By Directors
69 Statutory Declaration
70 Report Of The Auditors To The Members Of MAA Holdings Berhad
71 Balance Sheets As At 31 December 2006
73 Incomes Statements For The Financial Year Ended 31 December 2006
74 General Insurance Revenue Account For The Financial Year Ended 31 December 2006
75 General Insurance Revenue Account For The Financial Year Ended 31 December 2005
76 Life Fund Balance Sheets As At 31 December 2006
77 Life Insurance Revenue Account For The Financial Year Ended 31 December 2006
78 Consolidated Statement of Changes In Equity For The Financial Year Ended 31 December 2006
79 Company Statement of Changes In Equity For The Financial Year Ended 31 December 2006
80 Consolidated Cash Flow Statement For The Financial Year Ended 31 December 2006
82 Company Cash Flow Statement For The Financial Year Ended 31 December 2006
83 Notes To The Financial Statements - 31 December 2006
163 List Of Properties As At 31 December 2006
168 List Of Substantial Shareholers And Directors’ Shareholdings As At 18 May 2007
169 Statistics Of Shareholdings As At 18 May 2007

Financial
Highlights
Ten Years in Review
1997
RM mil
1998
RM mil
1999
RM mil
2000
RM mil
2001
RM mil
2002
RM mil
2003
RM mil
2004
RM mil
2005
RM mil
2006
RM mil
Profit Before Taxation (68) 52 101 25 47 50 73 63 41 3
Total Assets 1,116 1,528 2,102 2,755 4,356 4,705 5,550 6,164 6,551 7,167
Gross Premium
Income-Life Insurance
Division
463 481 571 1,059 1,781 857 1,146 1,290 1,423 1,448
Total Life New Business
Premiums
171 146 288 644 1,348 419 678 800 898 934
Gross Premium
Income-General
Insurance Division
263 327 298 302 347 433 460 407 460 453
2

Financial Highlights
3

MAA Regional Network
Dagupan
Manila
Makati
Philippiness
Alabang
Cebu
Medan
Malaysia
Pontianak
Indonesia
Jakarta
Surabaya
Bandung
Davao
Currently in
operations
Australia
Sydney
4

MAA Buildings
Menara MAA
Kuala Lumpur
5

MAA Buildings (continued)
1 2 3
4 5 6
7 8 9
10 11 12
6

MAA Buildings (continued)
13 14 15
16 17 18
1. Menara MAA Kota Kinabalu
2. Menara MAA Kuching
3. Menara MAA Seremban
4. Menara MAA Penang
5. Menara MAA Johor Bahru
6. Wisma MAA Butterworth
7. Wisma MAA Manjung
8. Wisma MAA Petaling Jaya
9. Wisma MAA Gurun
10. Wisma MAA Miri
11. Wisma MAA Segamat
12. Wisma MAA Kangar
13. Wisma MAA Kluang
14. Wisma MAA Melaka
15. Wisma MAA Sungai Petani
16. Wisma MAA Ipoh
17. Wisma MAA Kuantan
18. Wisma MAA Klang
19. Wisma MAA Batu Pahat
20. Wisma MAA Kuala Terengganu
21. Wisma MAA Tawau
22. Wisma MAA Muar
19 20 21 22
7

Board Of Directors’ Profi le
Tunku Tan Sri Abdullah Ibni
Almarhum Tuanku Abdul Rahman
Non-Independent Non-Executive Chairman
Tunku Tan Sri Abdullah Ibni Almarhum Tuanku Abdul Rahman, aged 82, a
Malaysian, is the Chairman of MAA Holdings Berhad (“MAAH”). He was appointed
to the Board on 8 June 1999
Tunku Tan Sri Abdullah is an indirect substantial shareholder by virtue of his
relationship with Tunku Dato’ Ya’acob who is the substantial shareholder of
Iternum Melewar Sdn Bhd, the substantial shareholder of MAAH. His shareholding
in the Company is disclosed in page 168 of the Directors’ Report.
Tunku Tan Sri Abdullah holds a Diploma in Public Administration from University
of Glasgow, Scotland and a Diploma in Agriculture from Miyazaki, Japan. He
actively served in the civil service for more than 10 years before being involved
in politics. He was the member for Parliament in Rawang Constituency from
1964 to 1974 whilst presiding in several voluntary organisations such as Malaysian
Association of Youth Clubs (1954 – 1970), Malaysia Youth Council (1966 – 1972),
Asian Youth Council (1972 –1978) and was also an executive member of the
World Assembly of Youth.
Currently, Tunku Tan Sri Abdullah also serves as the Chairman of the Board of
Melewar Industrial Group Berhad.
Tunku Tan Sri Abdullah does not have any personal interest in any business
arrangements involving the Company.
Tunku Tan Sri Abdullah does not have any confl ict of interest with the Company
and he has had no convictions for any offences within the past 10 years.
Tunku Dato’ Ya’acob bin Tunku Tan Sri Abdullah
Non-Independent Executive Deputy Chairman
+ Member of Audit Committee
Tunku Dato’ Ya’acob bin Tunku Tan Sri Abdullah, aged 46, a Malaysian, has been
a Director since its inception in November 1998. He was appointed as the Group
Managing Director/Chief Executive Offi cer in 1999. He was subsequently redesignated
as Deputy Chairman of the Company on 7 September 2006.
Tunku Dato’ Ya’acob obtained a Bachelor of Science (Honours) in Economics
and Accounting from The City of London University and is a Fellow Member of the
Institute of Chartered Accountants in England and Wales. He is also Member of the
Malaysian Institute of Accountants.
Tunku Dato’ Ya’acob started his career as an Auditor with Price Waterhouse in
London from 1982 to 1985 and subsequently, employed by the same fi rm in Kuala
Lumpur from 1986 to 1987. Tunku Ya’acob joined Malaysian Assurance Alliance
Berhad (“MAA”) in 1987 as Chief General Manager and has been heading the
MAAH Group of Companies since 1999.
Currently, Tunku Dato’ Ya’acob is a Board Member of Malaysian Assurance Alliance
Berhad (“MAA”), Melewar Industrial Group Berhad, M3nergy Berhad, Toyochem
Corporation Berhad, Mycron Steel Berhad, Melewar Group Berhad and several
private limited companies. His shareholding in the Company is disclosed in page
168 of the Directors’ Report.
Tunku Dato’ Ya’acob also serves in the following trade associations: the National
Insurance Association of Malaysia (NIAM) as Chairman, the Federation of Public
Listed Companies (FPLC) as Vice President, the Financial Planning Association of
Malaysia (FPAM) as Immediate Past President and the Federation of Malaysian
Unit Trust Managers (FMUTM) as Chairman.
Tunku Dato’ Ya’acob does not have any personal interest in any business
arrangements involving the Company.
Tunku Dato’ Ya’acob does not have any confl ict of interest with the Company
and he has had no convictions for any offences within the past 10 years.
8

Board Of Directors’ Profi le (continued)
Tunku Dato’ Seri Iskandar bin Tunku Tan Sri Abdullah
Non-Independent Non-Executive Director
+ Member of Nomination Committee
+ Member of Remuneration Committee
Tunku Dato’ Seri Iskandar bin Tunku Tan Sri Abdullah, aged 60, a Malaysian, was
appointed to the Board on 8 June 1999. He is an indirect substantial shareholder
by virtue of his relationship with Tunku Dato’ Ya’acob who is the substantial
shareholder of Khyra Legacy Berhad, the ultimate substantial shareholder of
the Company. His shareholding in the Company is disclosed in page 168 of the
Annual Report.
Tunku Dato’ Seri Iskandar holds a Master of Science degree in International
Marketing from the University of Strathclyde, United Kingdom. He is a Fellow of the
Chartered Institute of Marketing (UK), the Institute of Administrative Management
(UK) and the Institute of Marketing Malaysia.
Presently, Tunku Dato’ Seri Iskandar is the Chairman of Mycron Steel Berhad and
also serves on the Boards of Melewar Industrial Group Berhad, MBF Holdings
Berhad, MBF Corporation Berhad and Melewar Group Berhad.
Tunku Dato’ Seri Iskandar does not have any personal interest in any business
arrangements involving the Company.
Tunku Dato’ Seri Iskandar does not have any confl ict of interest with the Company
and has had no convictions for any offences within the last 10 years.
Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah
Non-Independent Non-Executive Director
Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah, aged 45, a Malaysian,
was appointed to the Board on 10 January 2007. He is an indirect substantial
shareholder by virtue of his relationship with Tunku Dato’ Ya’acob who is the
substantial shareholder of Khyra Legacy Berhad, the ultimate substantial
shareholder of the Company. His shareholding in the Company is disclosed in
page 168 of the Annual Report.
Tunku Yahaya graduated in 1983 with a Bachelor of Science (Hons) degree
in Economics and Accountancy from the City University, London. That year in
London, he joined Peat Marwick Mitchell & Co. In 1986, he obtained his Master
of Science in Economics from Birkbeck College, University of London. Returning
to Malaysia in 1986, he joined the advertising company, MZC-Saatchi & Saatchi.
In 1988, he joined the management of the refurnished Central Market (KL) as
Executive Director. In 1994, he was appointed to put into operation and manage
the television station, Metro Vision as Managing Director. In 1997, he started the
music recording label, Melewar Parallax Sdn Bhd.
He currently sits on the Boards of Melewar Industrial Group Berhad, Mithril Berhad,
Melewar Group Berhad, The Melewar Corporation Berhad and other several
private limited companies.
Tunku Yahaya does not have any personal interest in any business arrangements
involving the Company.
Tunku Yahaya does not have any confl ict of interest with the Company and has
had no conviction for any offences within the past 10 years.
9

Board Of Directors’ Profi le (continued)
Major General Lai Chung Wah (Rtd)
Independent Non-Executive Director
+ Chairman of Audit Committee
+ Member of Remuneration Committee
+ Member of Nomination Committee
Major General Lai Chung Wah (Rtd), aged 74, a Malaysian, was appointed to the
Board on 8 June 1999.
General Lai’s directorships in other public companies in the MAAH Group are
in MAAKL Mutual Bhd and MAA Bancwell Trustee Berhad. He is also a Board
Member of several private limited companies.
General Lai served the Malaysian Armed Forces in general and the Army in
particular for 35 years (1952 – 1987) and retired with the rank of Major General. He
is a graduate of the Royal Military Academy Sandhurst, United Kingdom in 1955
and the Command & Staff College, Quetta, Pakistan in 1963. He was awarded a
Diploma by the Armed Forces Defence College, Malaysia.
General Lai does not have any family relationship with any Director and/or major
shareholder of MAAH. He has no personal interest in any business arrangements
involving MAAH. He also does not have any shareholding in the Company. He
has had no convictions for any offences within the past 10 years.
Dato’ Iskandar Michael bin Abdullah
Independent Non-Executive Director
+ Chairman of Nomination Committee
+ Chairman of Risk Management Committee
+ Member of Audit Committee
+ Member of Remuneration Committee
Dato’ Iskandar Michael bin Abdullah, aged 62, a Malaysian, was appointed to
the Board on 30 April 2001.
Dato’ Michael is the senior partner of the law fi rm of Balendran Chong & Bodi
with offi ce in Kuantan. He specialises in conveyancing and corporate law. He
was born in Perak and did his schooling in St. Michael’s Institution Ipoh. He is
a Barrister-at-Law of Inner Temple, Inns of Court of London. Since 1969, he has
been practising law in Kuantan and was the Chairman of the Pahang Bar from
1985 to 1987.
Dato’ Michael does not have any family relationship with any Director and/
or major shareholder of MAAH. He has no personal interest in any business
arrangements involving MAAH. He also does not have any shareholding in the
Company and he has had no convictions for any offences within the past 10
years.
10

Board Of Directors’ Profi le (continued)
General Dato’ Sri Hj Suleiman bin Mahmud (Rtd)
Independent Non-Executive Director
+ Chairman of Risk Management Committee
+ Chairman of Remuneration Committee
+ Member of Audit Committee
General Dato’ Sri Hj Suleiman bin Mahmud (Rtd), aged 59, a Malaysian, was
appointed to the Board on 26 April 2005.
General Suleiman is a graduate of the Royal New Zealand Air Force Command
and Staff College and the United States Air Force, Air War College. He holds a
Master of Science Degree in Operational Research and Systems Analysis, and
a Post Graduate Diploma in Business Administration, both from the University of
Aston, United Kingdom. He has been appointed as an Honorary Fellows of the
Malaysian Institute of Logistics.
General Suleiman is also a director of MAA, a wholly-owned subsidiary of MAAH.
He also holds directorships in several private limited companies.
General Suleiman retired from the Royal Malaysian Air Force in March 2003 after
serving more than 38 years. Besides being a pilot, he had held several command
positions at various levels in the Air Force. He had also served in several positions
in the Department of Air Force and the Armed Forces Headquarters. He then
rose to become the Chief of Air Force before his retirement.
General Suleiman does not have any personal interest in any business
arrangements involving the Company.
General Suleiman does not have any family relationship with any Director and/or
major shareholder of MAAH and he has had no convictions for any offences
within the past 10 years.
Datuk Razman Md Hashim
Independent Non-Executive Director
Datuk Razman Md Hashim, aged 67, a Malaysian, was appointed to the Board on
1 July 2006.
Datuk Razman completed his early secondary education in Australia and on
completion studied Accounting and Banking where he became a member of the
Australian Institute of Bankers.
Upon his return to Malaysia, Datuk Razman joined Standard Chartered Bank Malaysia
Berhad (“SCB”) as an Offi cer Trainee in 1967. He held various senior positions and was
appointed as the Executive Director of SCB in 1994 until he retired in June 1999. Datuk
Razman also served in various capacities including secondment to the branches of
Standard Chartered Bank in London, Europe, Hong Kong and Singapore.
On his retirement in 1999, Datuk Razman was appointed Chairman of MBf Finance
Berhad by the Central Bank as its nominee until January 2002 when it was sold to
Arab-Malaysian Group.
Datuk Razman is currently the Deputy Chairman of the Sunway Group. He also holds
several directorships including Multi-Purpose Holdings Berhad, Ranhill Berhad, Affi n
Bank Berhad, Sunway City Berhad, Sunway Infrastructure Berhad and MAA.
Datuk Razman does not have any personal interest in any business arrangements
involving the Company.
Datuk Razman does not have any family relationship with any Director and/or major
shareholder of MAAH and he has had no convictions for any offences within the
past 10 years.
11

Board Of Directors’ Profi le (continued)
Tan Sri Ahmad bin Mohd Don
Independent Non-Executive Director
Y. Bhg. Tan Sri Ahmad Mohd Don, aged 59, a Malaysian, was appointed to the
Board on 13 October 2006.
Tan Sri is a Summa cum Laude graduate in Economics and Business from the
University of Wales, Aberystwyth, United Kingdom. He is also a Fellow of the
Institute of Chartered Accountants in England and Wales and a Member of the
Malaysian Institute of Certifi ed Public Accountants.
Tan Sri has extensive experience in fi nance and banking, having worked in
various capacities with Pernas Securities Sdn Bhd, Permodalan Nasional Berhad
and Malayan Banking Berhad. He served as the Group Managing Director and
Chief Executive Offi cer of Malayan Banking Berhad from 1991 to 1994. In May
1994, Tan Sri was appointed as the Governor of Bank Negara Malaysia for a
period of three years and in May 1997, he was re-appointed for a further period
of three years. He resigned in August 1998. Tan Sri currently serves on the Boards of
KAF Investment Bank Berhad, J.P. Morgan Chase Bank Berhad, Hing Yiap Knitting
Industries Berhad and United Malacca Berhad. Tan Sri is also the Independent
Non-Executive Chairman of Malaysian Assurance Alliance Berhad.
Tan Sri does not have any personal interest in any business arrangements involving
the Company.
Tan Sri does not have any family relationship with any Director and/or major
shareholder of MAAH and he has had no convictions for any offences within the
past 10 years. His shareholding in the Company is disclosed in page 168 of the
Annual Report.
Muhamad Umar Swift
Chief Executive Offi cer/Group Managing Director
Encik Muhamad Umar Swift, aged 42, a British, was appointed to the Board on
13 October 2006.
Encik Umar has more than 15 years experience in the areas of banking and
fi nancial services. He graduated with the Bachelor of Economics from the Monash
University, Clayton, Australia, in December 1985, and started his career with Price
Waterhouse, Chartered Accountants in January 1986. He began his career in
the banking industry in November 1992 as Manager, Corporate Finance, for the
Bank of Singapore (Australia) Limited where he held a number of positions before
joining Gas Malaysia Sdn Bhd, in January 1996, as General Manager, Corporate
Finance. He was promoted to Chief Executive Offi cer of Gas Malaysia in July
1997. He left Gas Malaysia in January 2002 to become a Practice Leader for the
Utilities Business of Deloitte Consulting in Malaysia. He joined Maybank in April
2004, as Executive Vice President - Head, Enterprise Financial Services Group. In
May 2006, Encik Umar left Maybank and joined MAAH as Deputy Chief Executive
Offi cer. He is appointed as the Chief Executive Offi cer/Group Managing Director
of MAAH in September 2006. He also serves on the Board of MAA.
Encik Umar is an Associate of the Institute of Chartered Accountants in Australia,
a member of AASA Certifi ed Practising Accountant, a Fellow of Tax Institute of
Australia and an Associate of the Institute of Securities Finance and Banking (ISFB)
in Australia. He is also a Registered Accountant with the Malaysian Institute of
Accountants.
Encik Umar does not have any personal interest in any business arrangements
involving the Company.
Encik Umar does not have any family relationship with any Director and/or major
shareholder of MAAH and he has had no convictions for any offences within the
past 10 years.
12

Board Of Directors’ Profi le (continued)
Yeo Took Keat
Group Chief Operating Offi cer
Non-Independent Executive Director
+ Member of Risk Management Committee
Mr Yeo Took Keat, aged 49, a Malaysian, was appointed to the Board on 24 February
2005.
Mr Yeo has vast experience in accounting and fi nance having served various
capacities in insurance companies and audit fi rm upon completing his studies in
1980. He joined MAA in 1986 and has held several positions, the last of which was as
Senior Vice President – Finance & Admin before his transfer to MAAH in May 2002 as
the Group Chief Operating Offi cer.
Mr Yeo is a Fellow of The Association of Chartered Certifi ed Accountants, United
Kingdom and a Member of the Malaysian Institute of Accountants. He is also an
Executive Committee member of the Federation of Public Listed Companies Berhad
and has contributed to the Working Groups on accounting standards led by the
Malaysian Accounting Standards Board.
Presently, Mr Yeo holds several directorships in other public companies in the MAAH
Group, namely, MAA, MAA Bancwell Trustee Berhad, MAAKL Mutual Bhd and Mithril
Berhad. He also serves on the Boards of several private limited companies in the
MAAH Group.
Mr Yeo does not have any personal interest in any business arrangements involving
the Company.
Mr Yeo does not have any family relationship with any Director and/or major
shareholder of MAAH and he has had no convictions for any offences within the past
10 years. His shareholding in the Company is disclosed in page 168 of the Annual Report.
Datuk Ramlan bin Abdul Rashid
Non-Independent Non-Executive Director
Datuk Ramlan bin Abdul Rashid, aged 49, a Malaysian, was appointed to the Board
on 7 September 2006. He is the Executive Director/Chief Executive Offi cer of MAA.
Datuk Ramlan graduated with B.Sc. (Hons) in Mathematics from the Universiti Sains
Malaysia (USM) in 1983 and Masters in Actuarial Science from Ball State University,
Indiana, USA in 1985. He had attended most of the major conferences of the industry
and top management courses such as Executive Program by Harvard Business
School, Executive Development programme on Financial and Marketing Strategies
by LIMRA and Global Leadership Development Programme by International Centre
for Leadership in Finance (ICLIF).
Datuk Ramlan started his life insurance career with MAA as an Actuarial Executive
in 1985 heading the Actuarial and Group Insurance Department. He became
Actuarial Manager in 1987 and was then promoted to Assistant General Manager
- Life Operations in 1989, responsible for the entire Life Operations and system
comprises of Actuarial, Group Insurance, Underwriting, Customer Service, Claims,
Information Technology and Agency Support Departments.
In 1991, he was promoted to be the General Manager - Life Insurance Division
responsible for the Life Operations, Marketing, Sales and Training. He was also
involved in the area of Business Strategic Planning, Financial performance and
Human Resource of the Company. He was promoted to be the President - Life
Division, Head Offi ce in 1996 and subsequently promoted to Executive Director/
Chief Executive Offi cer in August 2002.
Currently, he is also the Vice President of the Life Insurance Association of Malaysia
(LIAM) and the Convenor of Persatuan Insuran Am Malaysia’s (PIAM) Public Relations
and Education/HRD committee. In addition, he is also the Director of the Malaysian
Insurance Institute and Director of Malaysian Life Reinsurance Group Berhad.
Datuk Ramlan does not have any personal interest in any business arrangements
involving the Company.
Datuk Ramlan does not have any family relationship with any Director and/or major
shareholder of MAAH and he has had no convictions for any offences within the past
10 years. His shareholding in the Company is disclosed in page 168 of the Annual Report.
13

Corporate Information
BOARD OF DIRECTORS
Tunku Tan Sri Abdullah Ibni Almarhum Tuanku Abdul Rahman
Tunku Dato’ Ya’acob Bin Tunku Tan Sri Abdullah
Tunku Dato’ Seri Iskandar Bin Tunku Tan Sri Abdullah
Tunku Yahaya @ Yahya Bin Tunku Tan Sri Abdullah
Major General Lai Chung Wah (Rtd)
Dato’ Iskandar Michael Bin Abdullah
General Dato’ Sri Hj Suleiman Bin Mahmud (Rtd)
Datuk Razman Md Hashim
Tan Sri Ahmad Bin Mohd Don
Muhamad Umar Swift
Yeo Took Keat
Datuk Ramlan Bin Abdul Rashid
SECRETARIES
Yeo Took Keat (MIA No. 3308)
Lily Yin Kam May (MAICSA No. 0878038)
AUDITORS
PricewaterhouseCoopers
Chartered Accountants
REGISTERED OFFICE
Suite 20.03, 20th Floor, Menara MAA
12, Jalan Dewan Bahasa
50460 Kuala Lumpur
Telephone No.: 03-2141 3060
Facsimile No.: 03-2141 3061
PRINCIPAL PLACE OF BUSINESS
22nd Floor, Menara MAA
12, Jalan Dewan Bahasa
50460 Kuala Lumpur
Telephone No.: 03-2146 8300
Facsimile No.: 03-2142 5489
SHARE REGISTRAR
TRACE MANAGEMENT SERVICES SDN BHD
Suite 20.03, 20th Floor, Menara MAA
12, Jalan Dewan Bahasa
50460 Kuala Lumpur
Telephone No.: 03-2141 3060
Facsimile No.: 03-2141 3061
14

Corporate Information (continued)
PANEL OF REINSURERS 2007
General Insurance
Rating
Rating
Hannover Ruckversicherung, AG
Malaysian Branch
Suite 31-1, 31st Floor Wisma UOA II,
21, Jalan Pinang, 50450 Kuala Lumpur
AA-
(S&P)
Odyssey America Reinsurance Corporation,
Singapore Branch
9, Raffl es Place, #37-01, Republic Plaza,
Singapore 048619
A-
(S&P)
Munich Reinsurance Company,
Malaysian Branch
Suite 13.1, Level 13, Menara IMC,
8, Jalan Sultan Ismail, 50250, Kuala Lumpur
Sirius International Insurance Corporation
(PUBL), Labuan Branch
c/o MNI Offshore Insurance (L) Ltd.,
Level 11(B) Block 4, Offi ce Tower,
Financial Park Labuan Complex,
Jalan Merdeka, 87000 W.P. Labuan.
Management Offi ce:
24, Raffl es Place, #10-01/02,
Clifford Centre, Singapore 048621
Malaysian Reinsurance Berhad
12th Floor, Bangunan Malaysian Re,
No 17, Lorong Dungun, Damansara Heights,
50490 Kuala Lumpur
Labuan Reinsurance (L) Limited
Level 4 (B) Main Offi ce Tower,
Financial Park Labuan, Jalan Merdeka,
87000 W.P. Labuan
Everest Reinsurance Co
20 Cecil Street, #08-06, Equity Plaza,
Singapore 049705
AXA Re Asia Pacific Pte Ltd
152 Beach Road, #27-01, Gateway East,
Singapore 189721
China International Reinsurance Co Ltd,
Labuan Branch
c/o MNI Offshore Insurance (L) Ltd,
Level 11(B), Block 4, Offi ce Tower,
Financial Park Labuan Complex,
Jalan Merdeka, 87000 W.P. Labuan.
Partner Reinsurance Co Ltd., Labuan Branch
Level 11(B), Block 4 Offi ce Tower,
Financial Park Labuan Complex,
Jalan Merdeka, 87000 W.P. Labuan.
Management Offi ce :
2, Battery Road, #23-01 Maybank Tower,
Singapore 049907
AA-
(S&P)
A-
(S&P)
BBBpi
(S&P)
A-
(AM Best)
AA-
(S&P)
AA-
(S&P)
A-
(S&P)
AA-
(S&P)
Mitsui Sumitomo Reinsurance Ltd.,
Labuan Branch
Level 13 (F2) Main Offi ce Tower,
Financial Park Labuan, Jalan Merdeka,
87000 W.P. Labuan.
Marketing Offi ce:
Lot 14(A), 14th Floor, UBN Tower,
10 Jalan P. Ramlee, 50250 Kuala Lumpur.
Caisse Centrale de Reassurance,
Labuan Branch
c/o MNI Offshore Insurance (L) Ltd,
Level 11(B), Block 4, Offi ce Tower,
Financial Park Labuan Complex,
Jalan Merdeka, 87000 W.P. Labuan.
Swiss Reinsurance Company
Suite 28.01 & 28.02, 28th Floor,
Menara Keck Seng,
203, Jalan Bukit Bintang, 55100 Kuala Lumpur
B.E.S.T. Reinsurance Far East Regional Office,
Malaysia
Suite 3A, Level 8, Block 3A, Plaza Sentral,
Jalan Stesen Sentral 5, Kuala Lumpur Sentral,
50470 Kuala Lumpur
Limit - Lloyd’s Syndicate 0566 STN
Limit 566, Plantation Place, 30
Fenchurch Street, London, EC3M 3BD
Wellington - Lloyd’s Syndicate 2020 WEL
Wellington Underwriting, 88 Leadenhall
Street, London, EC3A 3BA
Momentum Underwriting Management
Limited (MUM)
as agents for 100% Transatlantic Reinsurance Company
Momentum Underwriting Management,
37-39 Lime Street, London, EC3M 7AY
AA-
(S&P)
AAA
(S&P)
AA
(S&P)
BBB
(S&P)
A
(S&P)
A
(S&P)
AA
(S&P)
Life Reinsurers
Rating
Rating
Malaysian Life Reinsurance Group Berhad
3B/21-3, Block 3B, Level 21, Plaza Sentral,
Jalan Stesen 5, Kuala Lumpur Sentral,
50470 Kuala Lumpur
AA-
(S&P)
Cologne Reinsurance Company plc.
Singapore Branch
9 Raffl es Place, #24-01 Republic Plaza,
Singapore 048619
AAA
(S&P)
SCOR Vie Singapore Branch
143 Cecil Street, #20-04 GB Building,
Singapore 069542
Munich Re Singapore Branch
20 Collyer Quay, #13-01 Tung Centre,
Singapore 049319
A-
(S&P)
AA-
(S&P)
Hannover Rueckversicherung,
AG Malaysia Branch
Suite 31-1, 31st Floor, Wisma UOA II,
21, Jln Pinang, 50450 Kuala Lumpur.
AA-
(S&P)
15

Corporate Information (continued)
GROUP STRUCTURE
MALAYSIAN
ASSURANCE
ALLIANCE
BERHAD
100%
MAA CREDIT SDN BHD
100%
MALAYSIAN ALLIANCE
PROPERTY SERVICES
SDN BHD
100%
MAAKL MUTUAL BHD
70%
MAA
TAKAFUL
BERHAD
100%*
MAAGNET SYSTEMS
SDN BHD
100%
WIRA SECURITY
SERVICES SDN BHD
100%
MAACA
LABUAN LTD
51%
MAA
HOLDINGS
BERHAD
MAA
CORPORATION
SDN BHD
100%
MAA CORPORATE
ADVISORY SDN BHD
100%
MERIDIAN ASSET
MANAGEMENT
SDN BHD
100%
MERIDIAN ASSET
MANAGEMENT
HOLDINGS SDN BHD
51%
MERIDIAN ASSET
MANAGEMENT
(ASIA) LTD
100%
MAA
BANCWELL
TRUSTEE
BERHAD
49%
MAA INTERNATIONAL
ASSURANCE LTD
100%
P.T.MAA LIFE
ASSURANCE
98%
P.T.MAA GENERAL
ASSURANCE
94%
MAA GENERAL
ASSURANCE
PHILIPPINES, INC
40%
MITHRIL
BERHAD
33%
MAA INTERNATIONAL
CORPORATION LTD
100%
MAA CORPORATE &
COMPLIANCE
PHILS, INC
100%
MAA INTERNATIONAL
INVESTMENTS LTD
100%
MAA MUTUALIFE
PHILIPPINES, INC
100%
MAYBACH
LOGISTICS
SDN BHD
45%
MULTIOTO BREAKDOWN
ASSISTANCE SDN BHD
100%
COLUMBUS CAPITAL
SINGAPORE LTD
100%
COLUMBUS CAPITAL
PTY LIMITED
43%
NISHIO RENT
ALL (M) SDN BHD
30%
16
* Note: The Group’s shareholding will be 75% upon full capitalisation of share capital.

Notice Of Ninth Annual General Meeting
NOTICE IS HEREBY GIVEN that the NINTH ANNUAL GENERAL MEETING of the Company will be held at The Auditorium, Podium 1, Menara
MAA, 12, Jalan Dewan Bahasa, 50460 Kuala Lumpur on Thursday, 28 June 2007 at 10.00 a.m. for the following purposes: -
AS ORDINARY BUSINESS
Resolution
(1) To receive the Audited Financial Statements for the year ended 31 December 2006 together with the Reports of the
Directors and the Auditors thereon.
(2) To approve the payment of a fi rst and fi nal tax-exempt dividend of 2% in respect of the fi nancial year ended 31 December
2006.
(3) To approve the increase of the Non-Executive Directors’ fees commencing from 1 January 2007.
(4) To approve the payment of Directors’ fees amounting to RM616,500.00 for the period from 1 January 2007 until the
forthcoming Annual General Meeting to be held in 2008 to be payable quarterly in arrears.
(5) To re-elect Dato’ Iskandar Michael bin Abdullah who is retiring in accordance with Article 73 of the Company’s Articles
of Association and who, being eligible, offers himself for re-election.
1
2
3
4
(6) To re-elect the following Directors of the Company who are retiring in accordance with Article 79 of the Company’s
Articles of Association and who, being eligible, offer themselves for re-election :-
(i)
(ii)
(iii)
(iv)
(v)
Datuk Razman Md Hashim bin Che Din Md Hashim
Muhamad Umar Swift
Datuk Ramlan bin Abdul Rashid
Tan Sri Ahmad bin Mohd Don
Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah
5
6
7
8
9
(7) To re-appoint the following directors who are retiring pursuant to Section 129(6) of the Companies Act 1965 to hold offi ce
until the conclusion of the next Annual General Meeting :-
(i) Tunku Tan Sri Abdullah ibni Almarhum Tuanku Abdul Rahman
(ii) Major General Lai Chung Wah (Rtd)
(8) To re-appoint Messrs. PricewaterhouseCoopers as Auditors of the Company and to authorise the Directors to fi x their
remuneration.
10
11
12
AS SPECIAL BUSINESS
(9) To consider and, if thought fi t, to pass the following resolutions as Ordinary/Special Resolutions: -
ORDINARY RESOLUTIONS
(a) Authority to allot and issue shares in general pursuant to Section 132D of the Companies Act, 1965
13
“THAT subject to the Companies Act, 1965, Articles of Association of the Company and approvals from the Bursa
Malaysia Securities Berhad and other Governmental or regulatory bodies, where such approval is necessary, full
authority be and is hereby given to the Directors pursuant to Section 132D of the Companies Act, 1965 to issue shares
of the Company from time-to-time and upon such terms and conditions and for such purposes as the Directors may,
in their discretion, deem fi t provided that the aggregate number of shares to be issued pursuant to this Resolution
shall not exceed ten percent (10%) of the issued share capital of the Company for the time being and such authority
shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”
17

Notice Of Ninth Annual General Meeting (continued)
(b) Proposed Renewal of authority for the Company to purchase its own shares
14
“THAT subject to compliance with Section 67A of the Companies Act 1965, the Listing Requirements of Bursa Malaysia
Securities Berhad (“Bursa Securities”) and any prevailing laws, rules, regulations, orders, guidelines and requirements
issued by any relevant authority, the Company be and is hereby unconditionally and generally authorized to purchase
and hold such number of ordinary shares of RM1.00 each in the Company (“Proposed Renewal of Share Buy-Back
Authority”) as may be determined by the Directors of the Company from time to time through the Bursa Securities
upon such terms and conditions as the Directors may deem fi t in the interest of the Company provided that the
aggregate number of shares to be purchased pursuant to this Resolution does not exceed ten percent (10%) of the
issued and paid-up share capital of the Company and that an amount not exceeding the Company’s total audited
retained profi ts of RM41,442,000 as at 31 December 2006 would be allocated by MAAH for the Proposed Renewal of
Share Buy-Back Authority.
AND THAT such authority shall commence immediately upon passing of this ordinary resolution and will expire at the
conclusion of the next Annual General Meeting of the Company unless earlier revoked or varied by ordinary resolution
of shareholders of MAAH in a general meeting or upon the expiration of the period within which the next Annual
General Meeting is required by law to be held whichever is the earlier but not so as to prejudice the completion of
purchase(s) made by the Company before the aforesaid expiry date;
AND THAT the Directors be and are hereby authorized to take all steps necessary to implement, fi nalise and to give full
effect to the Proposed Renewal of Share Buy-Back Authority and further THAT authority be and is hereby given to the
Directors to decide in their absolute discretion to either retain the shares so purchased as treasury shares or cancel
them or both.”
(c) Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature
(“RRPTs”)
15
“THAT the mandate granted by the shareholders of the Company on 21 June 2006 pursuant to paragraph 10.09 of
the Listing Requirements of the Bursa Malaysia Securities Berhad (“Bursa Securities”), authorizing the Company and
its subsidiaries (“the MAAH Group”) to enter into the recurrent related party transactions of a revenue or trading
nature which are necessary for the MAAH Group’s day-to-day operations as set out in Section 3 of Part B of the
Circular to Shareholders (“the Circular”) dated 6 June 2007 with the related parties mentioned therein, be and is
hereby renewed, AND THAT mandate be and is hereby granted by the shareholders of the Company to apply to the
additional recurrent related party transactions of a revenue or trading nature as set out in Section 3 of Part B of the
Circular with the related parties mentioned therein provided that :-
(a) the transactions are in the ordinary course of business and are on terms which are not more favourable to the
related parties than those generally available to the public and on terms not to the detriment of the minority
shareholders of the Company;
(b) the transactions are made at arm’s length and on normal commercial terms; and
(c) disclosure will be made in the annual report providing the breakdown of the aggregate value of the transactions
conducted pursuant to the mandate during the financial year, amongst others, based on the following information: -
i) the type of the RRPTs made;
ii) the names of the related parties involved in each type of the RRPTs made and their relationship with the
Company.
18

Notice Of Ninth Annual General Meeting (continued)
AND THAT, authority conferred by such renewed and granted mandate shall continue to be in force (unless revoked
or varied by the Company in general meeting), until
(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the forthcoming AGM at
which time it will lapse, unless by a resolution passed at that meeting or Extraordinary General Meeting whereby
the authority is renewed; or
(b) the expiration of the period within which the next AGM after the date it is required to be held pursuant to Section
143(1) of the Companies Act 1965 (“the Act”) (but shall not extend to such extension as may be allowed pursuant
to Section 143(2) of the Act); or
(c) revoked or varied by resolution passed by the shareholders in general meeting;
whichever is earlier.
AND THAT the Directors of the Company be authorised to complete and do all such acts and things (including
executing such documents as may be required) as they may consider expedient or necessary to give effect to the
transactions contemplated and/or authorised by this Ordinary Resolution.”
SPECIAL RESOLUTION
(d) Proposed Amendments to Articles of Association of the Company
16
“THAT the deletion, alterations, modifi cations and/or additions to the Articles of Association of the Company as set
out under Section 1 of Part C of the Circular to Shareholders of the Company dated 6 June 2007 be and are hereby
approved and adopted.”
NOTICE IS ALSO HEREBY GIVEN that the Register of Members of the Company will be closed at 5.00 p.m. on 12 July 2007 for the purpose of
determining shareholders’ entitlement to the First and Final tax-exempt dividend of 2% in respect of the fi nancial year ended 31 December
2006.
The dividend, if approved, will be paid on 10 August 2007 to shareholders whose names appear in the Record of Depositors dated 12 July
2007.
A Depositor shall qualify for entitlement to the dividend only in respect of: -
(a) Securities transferred into the Depositor’s Securities Account before 4.00 p.m. on 12 July 2007 in respect of transfers; and
(b) Shares bought on the Bursa Securities on a cum entitlement basis according to the Rules of the Bursa Securities.
By Order of the Board
YEO TOOK KEAT (MIA NO. 3308)
LILY YIN KAM MAY (MAICSA NO. 0878038)
Company Secretaries
Kuala Lumpur
Dated: 6 June 2007
19

Notice Of Ninth Annual General Meeting (continued)
NOTES: -
1. A member entitled to attend and vote at a meeting of the Company is entitled to appoint a proxy to attend and vote in his stead. A
proxy may but need not be a member of the Company.
2. A member of the Company who is an authorised nominee as defi ned under the Securities Industry (Central Depositories) Act 1991, may
appoint one (1) proxy in respect of each securities account.
3. The instrument appointing a proxy, shall be in writing under the hand of the appointer or his attorney duly authorised in writing, and in
the case of a corporation, either under seal or under hand of an offi cer or attorney duly authorised.
4. The instrument appointing a proxy must be deposited at the Company’s Registered Offi ce, Suite 20.03, 20th Floor, Menara MAA, No. 12,
Jalan Dewan Bahasa, 50460 Kuala Lumpur, not less than 48 hours before the time appointed for holding the meeting or any adjournment
thereof.
5. Any alteration in the form of proxy must be initialed.
6. Explanatory notes to Special Business of the Agenda 9 : -
(a) Authority to allot and issue shares in general pursuant to Section 132D of the Companies Act, 1965.
This resolution is proposed pursuant to Section 132D of the Companies Act, 1965, and if passed, will give the Directors of the Company,
from the date of the above Annual General Meeting, authority to issue and allot shares from the unissued share capital of the
Company for such purposes as the Directors deem fi t and in the interest of the Company. This authority, unless revoked or varied at
a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.
(b) Proposed Renewal of authority for the Company to purchase its own shares
The proposed Resolution 14, if passed, would empower the Directors to exercise the power of the Company to purchase its own
shares (“the Proposal”) by utilising its fi nancial resources not immediately required. The Proposal may have a positive impact on the
market price of the Company’s shares. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of
the next AGM of the Company.
(c) Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature (“RRPTs”)
The Proposed Resolution 15, if passed, will empower the Company to conduct recurrent related party transactions of a revenue
or trading nature which are necessary for the Group’s day-to-day operations, and will eliminate the need to convene separate
general meetings from time to time to seek shareholders’ approval. This will substantially reduce administrative time, inconvenience
and expenses associated with the convening of such meetings, without compromising the corporate objectives of the Group or
adversely affecting the business opportunities available to the Group.
The detailed information on Recurrent Related Party Transactions is set out in Part B of the Circular dated 6 June 2007 which is
dispatched together with this Annual Report.
(d) Proposed Amendments to Articles of Association of the Company
The Proposed Resolution 16, if passed, will update the Articles of Association of the Company to ensure continued compliance with
the Listing Requirements of Bursa Securities and to further enhance the administration of the internal affairs of the Company as well
as to streamline and add clarity to the Articles of Association.
Statement Accompanying Notice Of Annual General Meeting
The details of the Directors who are seeking for re-election or re-appointment in Agenda 5, 6 and 7 of the Notice of Ninth Annual General
Meeting of the Company are set out in the Directors’ Profi le on pages 8 to 13 of this Annual Report. Their securities holdings in the Company
are set out in the Analysis of Shareholdings which appears on page 168 of this Annual Report.
20

Penyata Pengerusi
Bagi pihak Lembaga Pengarah,
saya dengan sukacitanya
membentangkan Laporan Tahunan
dan Akaun Kumpulan bagi tahun
berakhir 31 Disember 2006.
PERSEKITARAN OPERASI
Sepanjang tahun 2006, ekonomi Malaysia terus mencatatkan
pertumbuhan mantap dengan peningkatan Keluaran Dalam Negara
Kasar (KDNK) sebanyak 5.9% (2005: 5.3%). Berasaskan sentimen
pengguna yang lebih kukuh dan keyakinan berterusan terhadap
prospek perniagaan, sektor swasta sekali lagi menjadi penyumbang
utama kepada pertumbuhan ekonomi, dipacu oleh pertumbuhan
kukuh sektor perkhidmatan dan pertanian serta disokong oleh
pemulihan sektor perlombongan dan pembinaan.
Pertumbuhan dalam sektor perkhidmatan didorong oleh kegiatan
pembiayaan dan perniagaan, khususnya dalam bidang pertumbuhan
baru, seperti yang dipaparkan oleh kepesatan subsektor pembiayaan,
insurans, hartanah dan perkhidmatan perniagaan yang meningkat
7.1% pada 2006 (2005: 5.7%). Secara khususnya, kegiatan insurans
kekal rancak dengan lebih banyak produk insurans perubatan
dan kesihatan juga prestasi produk berkaitan pelaburan yang
memberangsangkan.
Kerajaan Malaysia dan Bank Negara Malaysia (BNM) terus
mengamalkan dasar makroekonomi yang mendorong pertumbuhan
ekonomi dalam jangka panjang, dalam usaha menggalakkan
persekitaran perniagaan yang positif. MAA Holdings Berhad sebagai
sebuah kumpulan perkhidmatan kewangan bukan bank bersedia
untuk memanfaatkan pembangunan ekonomi yang pesat hasil
daripada rangsangan positif Kerajaan.
21

Penyata Pengerusi (bersambung)
TINJAUAN PRESTASI
Pada tahun yang dilaporkan, jumlah
hasil operasi Kumpulan meningkat
sebanyak 3.17% kepada RM2.28
bilion (2005: RM2.21 bilion). Pendapatan
premium kasar Bahagian Insurans Hayat
meningkat secara marginal sebanyak
2.11% kepada RM1.45 bilion (2005:
RM1.42 bilion) sementara Bahagian
Insurans Am mencatatkan kemerosotan
kecil dalam jumlah premium kasar
sebanyak 1.59% kepada RM452.64 juta
(2005: RM459.96 juta).
Kumpulan mencatatkan keuntungan
sebelum cukai lebih rendah berjumlah
RM3.11 juta bagi tahun dilaporkan,
berbanding keuntungan sebelum cukai
RM41.13 juta pada 2005. Bahagian
Insurans Hayat dan Bahagian Insurans
Am masing-masing menyumbang
keuntungan sebelum cukai RM34.32
juta (2005: RM20.23 juta) dan RM5.58
juta (2005: RM10.94 juta). Keuntungan
lebih rendah bagi Bahagian Insurans Am
dicatatkan terutamanya disebabkan
nisbah tuntutan lebih tinggi dalam tahun
dilaporkan dan peruntukan dibuat
bagi pinjaman tak berbayar tertentu.
Kerugian Dana Pemegang Saham
dicatatkan terutamanya disebabkan
peruntukan yang dibuat bagi pinjaman
tidak berbayar anak syarikat bukan
insurans yang terlibat dalam urusniaga
kredit. Dalam tahun dilaporkan,
Kumpulan telah melaksanakan polisi
peruntukan yang ketat bagi mengawal
segmen operasi ini.
Pada 2005, Dana Pemegang Saham
menghasilkan pendapatan operasi
lain lebih tinggi terutamanya kerana
kenaikan besar dalam nilai saksama
pelaburan ekuiti disebut harga di Sri
Lanka yang dibuat oleh anak syarikat
bukan insurans.
Pada tahun dilaporkan, nisbah
tuntutan Bahagian Insurans Am naik
daripada 59.02% pada 2005 kepada
70.87%. Peningkatan ini dicatatkan
terutamanya kerana keputusan pihak
pengurusan untuk meningkatkan aras
keyakinan bagi rizab tuntutan yang
ditanggung tetapi belum dilaporkan
(IBNR) daripada 50.00% kepada 65.00%
bagi anak syarikat insurans tempatan.
Langkah peningkatan secara beransuransur
dibuat sebagai persiapan untuk
menerima pakai cadangan Bank
Negara Malaysia untuk melaksanakan
Rangka Modal Berasaskan Risiko pada
2009.
Pada 31 Disember 2006, aset Kumpulan
berjumlah RM7.17 bilion, naik 9.47%
berbanding RM6.55 bilion pada 2005.
TINJAUAN OPERASI PERNIAGAAN
Pada tahun yang dilaporkan, Kumpulan
terus memberi tumpuan kepada empat
bidang teras operasi, iaitu Operasi
Insurans Hayat Malaysia, Operasi Insurans
Am Malaysia, Operasi Unit Amanah
Malaysia dan Operasi Antarabangsa.
Butiran prestasi setiap operasi dilaporkan
secara berasingan pada halaman
seterusnya.
DIVIDEN
Bagi tahun berakhir 31 Disember 2006,
Lembaga Pengarah telah mengesyorkan
pembayaran dividen bebas cukai
pertama dan terakhir sebanyak 2% (2005:
10%) sebagai ganjaran kepada semua
pemegang saham atas sokongan dan
keyakinan mereka terhadap Kumpulan.
Kumpulan akan terus berusaha
mencapai keseimbangan sewajarnya
yang mendukung matlamat memberi
pemegang saham pulangan tunai
berterusan daripada dividen, sambil
mengekalkan dana secukupnya
untuk membuat pelaburan semula
yang diperlukan bagi meningkatkan
keuntungan dan nilai masa depan
Kumpulan.
Perkembangan Mengenai
Cadangan Korporat Terkini
Kumpulan dengan sukacitanya
memaklumkan tentang perkembangan
terkini yang berikut:
(a) Pada 29 September 2004, MAAH
telah mengumumkan satu
cadangan korporat untuk membuat
terbitan hak boleh ditolak sehingga
152.18 juta Saham Keutamaan Tidak
Boleh Ditebus Baru bernilai RM1.00
sesaham (IPS) (IPS Hak) bersama
152.18 juta Saham Biasa boleh cerai
percuma bernilai RM1 sesaham
(Saham Biasa) (Saham Bonus) dan
sehingga 152.18 juta Waran boleh
cerai percuma (Waran) atas dasar
satu (1) IPS Hak bersama satu (1)
Saham Bonus boleh cerai percuma
dan satu (1) Waran boleh cerai
percuma untuk setiap satu (1) Saham
Biasa sedia ada yang dipegang
dalam syarikat pada tarikh kelayakan
yang akan ditentukan kemudian
(Terbitan Hak IPS). Terbitan Hak IPS
telah diluluskan oleh pemegang
saham Syarikat di Mesyuarat Agung
Tahunan Luar Biasa yang diadakan
pada 22 Februari 2005.
Memandangkan sentimen yang
kurang menggalakkan melanda
pasaran ekuiti Malaysia pada
waktu itu, MAAH, dengan kelulusan
Suruhanjaya Sekuriti (SC), telah
melanjutkan tarikh akhir Terbitan Hak
yang dicadangkan sebanyak dua
22

Penyata Pengerusi (bersambung)
MAA sentiasa memberi anda layanan mesra.
kali, pertamanya dari 3 Jun 2005 ke
31 Disember 2005, dan seterusnya
dari 1 Januari 2006 ke 30 Jun 2006.
Pada 3 Mei 2006, MAAH
mengumumkan bahawa selepas
mengambil kira sentimen pasaran
semasa dan prestasi saham biasa
MAAH di pasaran, Kumpulan telah
membuat keputusan membatalkan
Terbitan Hak IPS yang dicadangkan.
Walaupun cadangan Terbitan
Hak IPS dibatalkan, pada 3 Mei
2006 Lembaga Pengarah telah
mengumumkan bahawa MAAH
akan meneruskan Terbitan Bonus
Dicadangkan, membabitkan sehingga
152.18 juta saham biasa baru
bernilai RM1 sesaham sebagai
berbayar penuh atas dasar satu
(1) Saham Bonus bagi setiap satu
(1) saham biasa sedia ada yang
dipegang oleh pemegang saham
berdaftar MAAH pada waktu
penutup perniagaan pada tarikh
kelayakan yang akan ditentukan
dan diumumkan kemudian (Terbitan
Bonus Dicadangkan).
Terbitan Bonus Dicadangkan akan
dilaksanakan melalui kaedah
permodalan sehingga RM152.18
juta daripada akaun berikut.
(i) sehingga RM11.74 juta daripada
akaun premium saham; dan
(ii) sehingga RM140.44 juta
daripada untung tertahan.
Terbitan Bonus Dicadangkan ini telah
diluluskan oleh pemegang saham
MAAH di Mesyuarat Agung Tahunan
yang diadakan pada 21 Jun 2006.
Pada 19 Julai 2006, MAAH telah
mengemukakan Permohonan bagi
menyenaraikan saham biasa
tambahan yang diterbitkan menerusi
Terbitan Bonus Dicadangkan itu
kepada Bursa Malaysia Securities
Berhad (Bursa Securities). Kelulusan
Bursa diperolehi pada 1 Ogos
2006. Pada 9 Ogos 2006, MAAH
mengumumkan 25 Ogos 2006
sebagai tarikh kelayakan Saham
Bonus.
Seterusnya, sebanyak 152.18 juta
saham biasa baru bernilai RM1
sesaham telah diumpukkan pada 8
September 2006 di bawah Terbitan
Bonus Dicadangkan.
(b) Pada 4 Ogos 2006, MAAH
mengumumkan Cadangan Pengeluaran
Kertas Komersil (CP) dan/atau
Program Nota Jangka Pertengahan
(MTN) bernilai sehingga RM200 juta
(“Program Dicadangkan”).
Program Dicadangkan ini akan
membabitkan penerbitan CP
bertempoh antara satu (1) bulan
hingga dua belas (12) bulan dan/
atau MTN dengan tempoh lebih
daripada satu (1) tahun tetapi
tidak melebihi tujuh (7) tahun.
Hasil kutipan daripada Program
Dicadangkan itu akan digunakan
untuk membiayai pelaburan MAAH
dalam perniagaan Takaful, untuk
membayar balik pinjaman bank
MAAH dan anak syarikatnya yang
sedia ada, untuk membiayai
penebusan Bon Bersiri Kadar Tetap
sedia ada bernilai RM120 juta yang
matang pada 21 Ogos 2007, sebagai
prapembiayaan bagi akaun rizab
bayaran hutang yang diwujudkan
untuk Program Dicadangkan ini
dan untuk membiayai modal kerja
MAAH.
Berasaskan prestasi kewangan stabil
dan pengurusan rapi Kumpulan,
Rating Agency Malaysia (RAM)
telah memberi MAAH penarafan
jangka panjang A2 dan penarafan
jangka pendek P1 bagi Program
Dicadangkan.
Kelulusan bagi Program
Dicadangkan diperolehi pada 28
Ogos 2006 daripada SC.
Pada 5 Disember 2006, MAAH
mengemukakan permohonan kepada
SC untuk membuat perubahan berikut
kepada terma dan syarat utama
Program Dicadangkan:
(i) menjamin terbitan Program
Dicadangkan dengan
kemudahan jaminan bank
daripada DBS Bank Ltd,
Cawangan Labuan (DBS Bank)
sehingga jumlah prinsipal
agregat maksimum, bersamaan
nilai RM200 juta dalam mata
wang dolar Amerika Syarikat;
dan
(ii) menukar penggunaan hasil
kutipan Program Dicadangkan,
di mana antara lain, pelaburan
MAAH dalam perniagaan
Takaful akan dibiayai daripada
dana yang dihasilkan sendiri.
Berbekalkan kekuatan jaminan bank
daripada DBS Bank yang bertaraf
AAA- dalam Program Dicadangkan
itu, RAM telah memberikan
penarafan AAA(bg) bagi terbitan
Nota Jangka Pertengahan pertama
bernilai sehingga RM200 juta dan
bertempoh sehingga 5 tahun.
SC menerusi surat bertarikh 22
Disember 2006, telah meluluskan
perubahan yang dinyatakan di
atas.
23

Penyata Pengerusi (bersambung)
PERKEMBANGAN BARU PENTING
KEKUATAN JENAMA
TUMPUAN TERHADAP KUALITI
PELABURAN
Pada 8 Januari 2007, MAAH
berjaya menerbitkan Nota Jangka
Pertengahan dengan nilai nominal
RM200 juta untuk tempoh sehingga
5 tahun.
PERKEMBANGAN BARU PENTING
(a) MAA Takaful Berhad
Pada 3 Mac 2006, MAAH mendapat
kelulusan BNM bagi mendapatkan
lesen Takaful baru untuk syarikat usaha
sama antara MAAH dengan Solidarity
Company BSC (C) (Solidarity), Bahrain.
Solidarity ialah sebuah syarikat yang
ditubuhkan di bawah undang-undang
dan peraturan Bahrain dan terlibat
dalam perniagaan Takaful. Syarikat
ini ditubuhkan sebagai tindak balas
langsung untuk memenuhi permintaan
yang semakin meningkat bagi produk
Takaful di seluruh rantau Timur Tengah.
Solidarity beroperasi dengan mematuhi
sepenuhnya prinsip Syariah dan
menyediakan pilihan lengkap produk
Takaful Keluarga dan Am. Dengan
aset modal berjumlah lebih US$100 juta,
Solidarity ialah syarikat insurans terbesar
(dari segi modal berbayar) di Bahrain
dan merupakan syarikat Takaful dengan
modal paling besar di dunia.
Pada 21 Februari 2006, Perjanjian Usaha
Sama telah ditandatangani dengan
Solidarity untuk menubuhkan sebuah
syarikat usaha sama bagi menjalankan
perniagaan Takaful di Malaysia. Syarikat
usaha sama tersebut mempunyai
modal berbayar RM100 juta, dengan
75% kepentingan ekuiti MAAH dan 25%
Solidarity.
Pada 2 Mei 2006, sebuah anak syarikat
baru, MAA Takaful Berhad (MAA
Takaful) ditubuhkan dengan modal
saham dibenarkan RM150,000,000 yang
merangkumi 150,000,000 saham biasa
bernilai RM1.00 sesaham, yang mana
RM2.00 telah diterbitkan dan berbayar
penuh.
Pada 16 November 2006, MAA Takaful
telah mengemukakan permohonan
kepada SC bagi menambahkan modal
berbayar.
Menerusi surat bertarikh 15 Januari 2007,
SC meluluskan permohonan tersebut.
Setakat ini, MAAH dan Solidarity telah
meletakkan saham modal ekuiti mereka
ke MAA Takaful.
Kumpulan telah menetapkan sasaran
untuk memulakan operasi Takaful pada
tiga suku tahun 2007.
Kumpulan yakin syarikat usaha sama
Takaful ini akan pulang modal dalam
beberapa tahun awal operasi dengan
memanfaatkan rangkaian agensi MAA
yang kukuh, di mana kira-kira 40% atau
7,000 daripada tenaga agensi hayatnya
adalah ejen Bumiputera, di samping
kelebihannya memiliki infrastruktur sedia
ada yang akan membantu mencapai
kos tetap yang rendah.
Akhir sekali, Kumpulan akan mengambil
kesempatan daripda usaha sama
Takaful dengan Solidarity sebagai
landasan untuk menceburi pasaran
global, khususnya bangsa Islam di Timur
Tengah pada masa depan.
(b) Columbus Capital Pty Limited
Pada 13 September 2006, MAA
International Investment Ltd (MAAII),
anak syarikat milik penuh Kumpulan,
telah mengambil alih sebuah syarikat
tidak beroperasi bernama Columbus
Capital Singapore Pte Ltd (CCS), sebuah
syarikat ditubuhkan di Singapura yang
akan menjadi entiti tujuan khas bagi
sebarang pelaburan syarikat pada
masa depan.
Pada 22 September 2006, CSS
memeterai perjanjian langganan
bersyarat dengan Columbus Capital
Pty Limited (CCAU) untuk melanggan
sehingga 20.0 juta Saham Keutamaan
Siri A pada harga terbitan AUD1.00
setiap satu, yang merangkumi 50%
kepentingan ekuiti dalam CCPL untuk
pertimbangan tunai berjumlah AUD20.0
juta atau bersamaan RM57.0 juta
(Langganan Dicadangkan). Secara
serentak, CCS bersama pengasas CCAU
telah memeterai perjanjian pemegang
saham untuk mengawal selia hak dan
kewajipan masing-masing sebagai ahli
CCAU. CCAU telah diperbadankan di
Australia.
Langganan Dicadangkan itu pada
asasnya membabitkan dua (2)
peringkat:
(i) Peringkat 1 – Langganan 15.0 juta
Saham Keutamaan CCS pada
harga terbitan AUD1.00 sesaham,
yang mencakupi kepentingan ekuiti
42.86% dalam CCAU bagi jumlah
pertimbangan tunai AUD15.0 juta,
yang dijangka disempurnakan
menjelang Oktober 2006;
(ii) Peringkat 2 – Langganan sebanyak 5
juta Saham Keutamaan oleh pelabur
atau CCS pada harga terbitan
AUD1.00 sesaham, yang mencakupi
12.5% daripada kepentingan ekuiti
diperluas dalam CCAU, untuk
jumlah pertimbangan tunai AUD5.0
juta, yang akan diselesaikan pada
atau sebelum 300 hari kalendar
24

Penyata Pengerusi (bersambung)
selepas selesainya peringkat 1, yang
ditetapkan buat sementara waktu
untuk disempurnakan pada Ogos
2007.
Pertimbangan tunai sehingga AUD20.0
juta akan dijelaskan menerusi pinjaman
bank dan/atau daripada dana dalaman
Kumpulan.
Langganan Dicadangkan akan
membuka jalan bagi Kumpulan untuk
meneroka perniagaan pinjaman gadai
janji runcit dan pensekuritian pinjaman
di Australia, sejajar dengan aspirasi
Kumpulan untuk mempelbagaikan aliran
pendapatannya.
Peringkat 1 Langganan Dicadangkan
telah disempurnakan pada 6 Oktober
2006.
KEKUATAN JENAMA
Kumpulan akan meneruskan usaha
membina kekuatan jenama untuk
mengekalkan imej korporat teguh yang
dibangunkan sehingga kini. Imej ini
menjadi tunjang kekuatan dan menjadi
tunggak yang memastikan pelanggan
dan ejen terus setia.
Dalam pada itu, bangunan pejabat
yang tersergam indah dan dimiliki sendiri
di seluruh Malaysia, iklan televisyen,
papan tanda lebuh raya dan iklan media
cetak, aktiviti perhubungan awam juga
program kebajikan yang tersusun terus
meyakinkan pelanggan dan ejen agar
terus menaruh kepercayaan terhadap
Kumpulan.
Cogan kata korporat kami
sememangnya terkenal, “Katakan Ya
kepada MAA. Katakan Ya Kepada
Jaminan Kewangan Yang Teguh”.
TUMPUAN TERHADAP KUALITI
Kumpulan juga berbangga untuk
melaporkan bahawa operasi insurans
Malaysia telah mengekalkan status
kualiti ISO 9001 sejak tujuh tahun lalu.
Tumpuan berterusan dalam usaha
menyenggarakan sistem IT dan proses
dalaman yang rapi, latihan kakitangan
dan program pendidikan, disokong oleh
pelaksanaan program Six Sigma sejak
2005 dalam operasi Insurans Malaysia
telah membantu memastikan bahawa
pelanggan kami mendapatkan
perkhidmatan yang terbaik. Hanya
menerusi usaha tertumpu terhadap
kualiti barulah Kumpulan dapat
menjamin kejayaan pada masa depan.
PELABURAN
Berikutan prestasi Bursa Saham
Kuala Lumpur (BSKL) yang lebih baik
sejak separuh kedua tahun, jumlah
pendapatan pelaburan Kumpulan
meningkat 68.32% kepada RM391.84 juta
(2005: RM232.80 juta), selepas pengiraan
semula peruntukan bagi pengurangan
nilai pelaburan yang disebut harga
berjumlah RM148.00 juta pada tahun
dilaporkan (2005: peruntukan sebanyak
RM90.96 juta dibuat bagi mengurangkan
nilai pelaburan disebut harga).
Pelaburan dalam sekuriti pendapatan
tetap masih merangkumi sebahagian
besar daripada portfolio pelaburan, iaitu
82.61% daripada jumlah pendapatan
pelaburan.
Kumpulan akan meneruskan prinsip
pelaburan konservatif yang menekankan
pemeliharaan modal, keuntungan
dan aliran pendapatan konsisten
supaya nilainya terlindung daripada
ketidakstabilan pasaran. Pelaburan
pendapatan tetap dijangka kekal
sebagai aset portfolio teras, di mana
bon korporat akan menjadi menjadi
instrumen pilihan memandangkan
hasilnya lebih tinggi berbanding deposit
tetap dan tunai.
Sebagai langkah berdaya maju,
kami akan mengkaji semula portfolio
pelaburan dana Hayat tanpa
penyertaan dan dana Am dengan
mengurangkan pendedahan kepada
portfolio ekuiti yang disebut harga untuk
melindungi pendapatan Kumpulan
daripada ketidakstabilan pasaran
ekuiti. Namun begitu, Kumpulan akan
terus meninjau dan menyemak semula
strategi pelaburan untuk mengambil
kesempatan daripada persekitaran
ekonomi dan kewangan yang dijangka
kukuh pada tahun-tahun akan datang.
TEKNOLOGI MAKLUMAT
Sejajar dengan Rancangan Strategi
Teknologi Maklumat (IT) 5 tahun MAA
yang dirumuskan pada 2005 dengan
matlamat utama menyokong keperluan
perniagaan masa depan, MAA berjaya
melaksanakan beberapa sistem utama
pada tahun yang dilaporkan:
(1) Sistem Jualan Pengurusan
Konsultan (CMSS)
Sistem aplikasi ini memberi sokongan
kepada konsultan Insurans Hayat
dengan:
- menyediakan alat yang
diperlukan dan laporan yang
terkini untuk meningkatkan
produktiviti para konsultan
25

Penyata Pengerusi (bersambung)
- meningkatkan kualiti
perkhidmatan kepada
pelanggan dan menjalin
hubungan yang lebih rapat
dengan pelanggan
- menyediakan komunikasi
berhadapan dalam talian
dengan MAA
(2) Sistem e-Tuntutan Hayat
Sistem berasaskan aliran kerja
ini meringkaskan kerja manual
menggunakan pemprosesan
berkomputer dengan:
- mengurangkan pencarian
dokumen secara manual yang
memakan masa
- menjejak status fail tuntutan
- menyediakan kemudahan
kelulusan berhadapan dalam
talian untuk masa pusing ganti
pemprosesan yang pantas
(3) Sistem Insurans Am Baru Fasa 2
Sistem ini dilaksana berasaskan
“tumpuan terhadap pelanggan”
menggunakan proses berkomputer
sepenuhnya untuk meningkatkan
keupayaan pengawasan dan
laporan.
(4) Pencetakan Polisi Motor Dalam
Talian
Pencetakan polisi motor dalam
talian membolehkan ejen yang
mempunyai sambungan dalam
talian untuk mengeluarkan nota
lindung motor elektronik dan
mencetak polisi motor dengan sertamerta.
PENILAIAN PERNIAGAAN
INSURANS MALAYSIA
Seperti tahun-tahun lepas, Kumpulan
telah melantik aktuari luar untuk mengira
Nilai Taksiran bagi Perniagaan Insurans
Hayat Malaysia, menggunakan teknik
penilaian sama yang digunakan di
peringkat antarabangsa untuk menilai
perniagaan insurans hayat. Nilai Taksiran
ialah aliran tunai keuntungan terdiskaun
kepada pemegang saham, daripada
polisi yang dijual pada masa lepas (nilai
terbenam) dan daripada jualan polisi
masa depan (nilai terstruktur).
Berasaskan Nilai Taksiran, seperti
yang dibentangkan pada muka
surat 41 hingga 44, portfolio insurans
hayat Malaysia diberikan tiga (3)
nilai, berasaskan andaian senario
pertumbuhan masa depan, iaitu RM2.09
bilion, RM2.63 bilion dan RM3.37 bilion.
Jika seseorang menilai perniagaan
insurans am Malaysia pada 85%
pendapatan premium kasar berjumlah
RM413.10 juta pada tahun 2006, maka
nilai Bahagian ini adalah RM351 juta.
Bahagian Insurans Hayat dan Am
kemudiannya dinilai pada RM3.73
bilion (Nilai Penuh), RM2.99 bilion
(Nilai Pertengahan) dan RM2.45 bilion
(Penilaian Rendah).
Lembaga Pengarah sentiasa memantau
penilaian ini bagi operasi insurans
Malaysia kerana perangkaannya boleh
digunakan sebagai asas bagi rundingan
penggabungan atau pemerolehan
masa depan.
Harus diingat bahawa jika MAAH dinilai
pada penilaian yang sama dengan
operasi insurans Malaysia, nilai harga
saham Kumpulan adalah jauh lebih
tinggi daripada harga semasa RM1.76
sesaham pada 31 Disember 2006. Jika
Dana Pemegang saham akhir tahun
MAAH yang bernilai RM368.3 juta turut
diambil kira, harga saham Kumpulan
ialah RM13.47 sesaham (Penilaian
Penuh), RM11.03 sesaham (Penilaian
Pertengahan) dan RM9.26 sesaham
(Penilaian Rendah).
TANGGUNGJAWAB SOSIAL
KORPORAT
Kumpulan juga terus berpegang kukuh
kepada iltizamnya untuk menjadi
warga korporat yang prihatin dan
bertanggungjawab. Untuk itu, Kumpulan
telah menubuhkan Dana Amal Buah
Pinggang MAA-MediCare sejak 1994,
dengan matlamat menyediakan
rawatan dialisis buah pinggang pada
kos lebih rendah dan telah menaungi
Yayasan Kebajikan Budimas pada 2002
dengan matlamat menjaga kebajikan
kanak-kanak kurang bernasib baik dan
golongan miskin.
Pelbagai aktiviti yang dianjurkan oleh
Dana Amal Buah Pinggang MAA-
Medicare dan Yayasan Kebajikan
Budimas dalam tahun yang dilaporkan
dipaparkan secara berasingan pada
halaman yang dilampirkan.
26

Penyata Pengerusi (bersambung)
TEKNOLOGI MAKLUMAT
PENILAIAN PERNIAGAAN INSURANS MALAYSIA
TANGGUNGJAWAB SOSIAL KORPORAT
PROSPEK
PENGIKTIRAFAN DAN PENGHARGAAN
PROSPEK
Laporan Tahunan BNM 2006 menyatakan
bahawa ekonomi Malaysia dijangka
tetap menggalakkan pada 2007
berasaskan permintaan dalam negara
yang teguh dan pertumbuhan pesat
aktiviti pelaburan, walaupun dalam
keadaan ekonomi global yang agak
sederhana. Pelaksanaan projek
Rancangan Malaysia Kesembilan yang
bermula pada suku keempat 2006
menyokong keyakinan BNM.
Kumpulan meramalkan bahawa
tahun 2007 lebih mencabar dalam
suasana persaingan lebih sengit dan
proses liberalisasi industri perkhidmatan
kewangan Malaysia, sejajar dengan
pelaksanaan Rancangan Induk Sektor
Kewangan oleh BNM.
Kumpulan mengambil kira segala
cabaran yang bakal dihadapi dan akan
meneruskan inisiatif untuk melabur dalam
teknologi terbaru bagi meningkatkan
lagi kecekapan operasi, mengukuhkan
sistem pengedaran, sumber manusia
dan pembangunan agensi dan
menghasilkan produk inovatif untuk
meningkatkan lagi kualiti perkhidmatan
kepada pelanggan.
Kumpulan yakin bahawa dengan
rangkaian cawangan luas, produk
dan perkhidmatan inovatif, saluran
pengedaran kukuh menerusi khidmat
agensi dan bankasurans dan akhir sekali
berlandaskan jenama MAA yang teguh,
Kumpulan bersedia untuk menghadapi
cabaran mendatang dan mencatat
keputusan lebih baik pada tahun-tahun
akan datang.
PENGIKTIRAFAN DAN
PENGHARGAAN
Bagi pihak Lembaga Pengarah, saya
ingin menyampaikan ucapan terima
kasih kepada pasukan pengurusan dan
kakitangan di atas komitmen, dedikasi
dan sumbangan mereka dalam
menjamin pertumbuhan dan kejayaan
berterusan Kumpulan.
Saya juga ingin mengambil kesempatan
ini untuk merakamkan penghargaan
kepada pihak berkuasa kawal selia di
atas segala panduan dan sokongan;
juga ucapan terima kasih kepada para
pelanggan, ejen, sekutu perniagaan
dan pemegang saham yang dihargai
di atas sokongan berterusan, keyakinan
dan kepercayaan yang diberikan
kepada kami.
Akhir sekali, saya ingin mengucapkan
terima kasih kepada ahli Lembaga
Pengarah atas panduan dan
sumbangan mereka kepada Kumpulan.
TUNKU TAN SRI ABDULLAH IBNI
ALMARHUM TUANKU ABDUL RAHMAN
Pengerusi
27

Tinjauan Operasi Perniagaan
TINJAUAN
PERNIAGAAN MALAYSIA
TINJAUAN INSURANS HAYAT
MALAYSIA
Meskipun menghadapi cabaran sengit
daripada pesaing, Bahagian Insurans
Hayat mencatat sedikit kenaikan jumlah
pendapatan premium sebanyak 0.72%,
untuk menghasilkan pendapatan
premium berjumlah RM1.40 bilion (2005:
RM1.39 bilion), dengan sebahagian besar
jualan daripada perniagaan premium
tunggal, khususnya pelan endowmen dan
pelan berkaitan pelaburan.
28
Kejayaan
mengekalkan tahap pendapatan
premium ini adalah hasil kegigihan
rangkaian cawangan MAA yang luas
di seluruh negara (kini berjumlah 76
cawangan) dan keteguhan tenaga
agensinya memantapkan kecekapan
pengedaran dan meningkatkan
kesedaran jenama. Kadar faedah
semasa yang rendah dan perubahan
kecenderungan pengguna, daripada
polisi perlindungan biasa kepada polisi
yang menawarkan tabungan/pelaburan,
telah menyumbang kepada jualan
produk berkaitan pelaburan dan pelan
endowmen.
Dari segi premium perniagaan baru
tunggal dan tahunan yang merupakan
ukuran bagi aktiviti jualan tahunan baru,
Bahagian Insurans Hayat telah mencatat
pertumbuhan secara marginal sebanyak
3.97% kepada RM934.10 juta (2005:
RM898.4 juta).
Sungguhpun mencatat jumlah
pendapatan premium yang hampir
sama, Bahagian Insurans Hayat
melaporkan Keuntungan Sebelum Cukai
lebih tinggi, yang meningkat daripada
RM12.25 juta pada 2005 kepada RM21.96
juta pada 2006. Ini sebahagian besarnya
adalah disebabkan penarikbalikan
peruntukan bagi susut nilai pelaburan,
hasil daripada prestasi pasaran saham
yang lebih baik pada separuh kedua
2006, walaupun terdapat kenaikan
bayaran bonus tunai dan tuntutan
perubatan daripada polisi perubatan.
Tanpa mengira pemindahan keuntungan
kepada akaun Dana Pemegang Saham,
Lebihan Dana Insurans Hayat secara
keseluruhan tetap kukuh, dengan lebihan
terkumpul dibawa ke hadapan sebanyak
RM482.88 juta pada 31 Disember 2006.
Dalam usaha latihan berterusan untuk
memantapkan agensi, MAA telah
memperkenalkan program Chartered
Insurance Agency Manager (CIAM)
kepada konsultan-konsultan insurans
hayatnya pada 2006, dengan objektif
untuk meningkatkan kemahiran
pengurusan agensi, tanggungjawab
pemimpin, misi dan matlamat agensi,
teknik dan proses pengambilan
konsultan, serta penyeliaan dan latihan.
MAA percaya pasukan agensi patut
memperkasakan diri supaya sentiasa
mendahului pesaing.
Setakat akhir Disember 2006, MAA
mempunyai seramai 10,671 konsultan
(2005 : 12,773). Angka ini menyusut
selepas MAA melaksanakan langkah
pembersihan secara sistematik untuk
menggugurkan agensi yang tidak aktif
pada tahun dalam tinjauan. Dalam
mengorak langkah ke hadapan, MAA
memberi penekanan kepada usaha
untuk meluas dan mengukuhkan
agensinya dengan mengambil konsultan
dan pemimpin baru bagi memantapkan
saluran pengedarannya.
Bahagian Insurans Hayat menyedari
perubahan kecenderungan orang
ramai terhadap pelan berkaitan
pelaburan. Kumpulan menjangkakan
kecenderungan ini akan berterusan pada
masa hadapan dan kini merancang lebih
banyak pelan berkaitan pelaburan yang
menarik bagi memenuhi permintaan
yang sentiasa meningkat.
Sepanjang 2006, beberapa pelan baru
telah dilancarkan, termasuk pelan
berkaitan pelaburan Maaster Capital
Guaranteed, Pelan MAA Global Asset
Capital Guaranteed, pelan kemalangan
peribadi – Senior Gold, pelan hayat biasa
– 20 PayMaster Guaranteed, Freedom 20
Star dan SmartLife Limited Pay.
MAA sentiasa mengutamakan kepuasan
pelanggan. Ia akan mengekalkan
strateginya dan meneruskan pelbagai
inisiatif yang sudah dimulakan, termasuk
pelaksanaan Indeks Kepuasan
Pelanggan (CSI) bagi memperbaiki dan
mempertingkatkan kualiti perkhidmatan
kepada para pelanggan. Untuk itu, MAA
telah menubuhkan Pasukan Projek Idea
Factory pada 2006, dengan objektif untuk
menggalakkan kakitangan menjanakan
idea-idea baru bagi memperbaiki
perkhidmatan kepada pelanggan,
membangunkan produk yang inovatif
dan meningkatkan kecekapan operasi
serta produktiviti menerusi inovasi
organisasi, dengan menggunakan proses,
pemikiran dan metodologi perniagaan
yang tertentu.
TINJAUAN INSURANS AM
MALAYSIA
Bahagian Insurans Am mencatat
sedikit kemerosotan sebanyak 2.63%
dalam premium bertulis kasar kepada
RM413.10 juta (2005: RM424.25 juta),
meskipun Industri Insurans Am mencatat
pertumbuhan premium lebih rendah, iaitu
3.23% pada 2006 (2005: 7.80%).

Tinjauan Operasi Perniagaan (bersambung)
Premium daripada insurans kenderaan
bermotor merosot 6.58% kepada
RM194.30 juta (2005: RM207.99 juta),
sebahagian besarnya adalah disebabkan
kelembapan jualan kenderaan dalam
industri yang telah menjejaskan
perniagaan ini. Walaubagaimanapun,
premium perniagaan motorsikal
meningkat sebanyak 1.76% kepada
RM42.20 juta (2005: RM41.47 juta). Di
samping itu, strategi taja jamin lebih ketat
yang dilaksanakan pada 2004, telah dan
akan terus, mengekang pertumbuhan
dalam segmen ini walaupun kualiti
portfolio insurans kenderaan meningkat.
Namun, premium portfolio bukan
kenderaan meningkat secara marginal
sebanyak 1.03% kepada RM176.60 juta
(2005: RM174.80 juta).
Perniagaan insurans kenderaan bermotor
terus memainkan peranan penting,
dengan menyumbang 47.03% daripada
jumlah pendapatan premium kasar
Bahagian Insurans Am (2005: 50.35%).
Perkongsian perniagaan motorsikal
telah meningkat dari 9.77% dalam 2005
kepada 10.21%. Sumbangan portfolio
bukan kenderaan meningkat, dengan
Insurans Kebakaran, Perniagaan Pelbagai
dan Marin masing-masing menyumbang
15.45%, 20.98% dan 6.32% (2005: 15.31%,
22.18% dan 4.82%).
Sepanjang tahun dalam tinjauan, nisbah
tuntutan meningkat kepada 71.83%
(2005: 62.18%), sebahagian besarnya
adalah disebabkan tuntutan lebih tinggi
yang dialami oleh perniagaan insurans
kenderaan dan motosikal.
Sungguhpun berdepan dengan tuntutan
yang lebih tinggi, Bahagian ini mencatat
Kerugian Sebelum Cukai lebih rendah
sebanyak RM6.33 juta berbanding
kerugian RM10.60 juta pada 2005.
Keputusan yang lebih baik ini adalah
disebabkan penarikbalikan peruntukan
bagi susut nilai pelaburan pada tahun
dalam tinjauan hasil daripada prestasi
pasaran saham yang lebih baik pada
separuh kedua 2006, meskipun terdapat
kenaikan nisbah tuntutan daripada 62.18%
pada 2005 kepada 71.83%. Kenaikan ini
sebahagian besarnya adalah disebabkan
keputusan pihak pengurusan untuk
menaikkan aras keyakinan rizab tuntutan
yang ditanggung tetapi tidak dilaporkan
(IBNR), daripada 50.00% kepada 65.00%
bagi anak syarikat insurans tempatan,
kenaikan secara beransur sebagai
persediaan menghadapi cadangan Bank
Negara Malaysia untuk melaksanakan
Rangka Kerja Modal Berasaskan Risiko
pada 2009.
Sejak 2001, Industri Insurans Am telah
mengemukakan cadangan kepada
pihak berkuasa kawal selia untuk
mengimbangkan semula tarif premium
insurans kenderaan bermotor, yang kali
terakhir disemak semula pada 1978, atau
28 tahun dahulu. Semakan semula tarif
ini perlu untuk menampung kos alat ganti
kenderaan yang sentiasa meningkat,
kecurian kenderaan yang semakin
kerap berlaku dan award lebih tinggi
yang diputuskan oleh mahkamah. Tarif
baru yang dicadangkan mengambil
kira faktor-faktor baru yang dahulunya
tidak dihiraukan, iaitu: lokasi, jantina, usia
dan sejarah tuntutan pemandu, serta
butir-butir seperti model dan syarikat
yang membuat kenderaan. Sehingga
sekarang, keputusan mengenai perkara
ini masih belum dibuat.
Dalam usaha kami yang berterusan
untuk memberikan perkhidmatan lebih
baik kepada pelanggan, Bahagian
Insurans Am telah melancarkan Skim
Bantuan Kemalangan pada 2006,
untuk memberikan bantuan di lokasi
kepada semua yang membuat
panggilan melaporkan kemalangan
dan pelanggaran, selain perkhidmatan
Bantuan Kerosakan MotorClub di seluruh
negara. Pada masa yang sama, Bahagian
ini telah melaksanakan peruntukan
perkhidmatan pencegahan dan
penilaian risiko kebakaran komprehensif
secara percuma kepada pemegang
polisi kebakaran. Ini akan membolehkan
pemegang polisi kebakaran menikmati
kadar premium lebih baik dengan sistem
pencegahan kebakaran lebih baik
juga berkesan dan serentak dengan itu,
membantu mengurangkan kejadian
kebakaran.
Dalam mengorak langkah ke hadapan,
Bahagian ini merancang untuk
meningkatkan portfolio bukan kenderaan
dengan tumpuan kepada kelas insurans
yang menguntungkan, khususnya
insurans kebakaran, kargo marin, pekerja
asing dan semua risiko kontraktor dan
kejuruteraan, untuk merebut peluangpeluang
daripada pembangunan
infrastruktur di bawah Rancangan
Malaysia Ke-9 dan projek mega yang
lain. Pada masa yang sama, Bahagian ini
akan meningkatkan strategi pengurusan
tuntutannya yang antara lain termasuk
sistem aliran kerja berasaskan internet
bagi tuntutan Kenderaan OD (kerosakan
sendiri), mengekalkan peranan Jabatan
Penyelesaian Terus dan Awal Baru dalam
mengurus dan menyelesaikan tuntutan
baru dan kecil Insurans Motor Kecederaan
Badan Pihak Ketiga mempercepat
urusan mendapatkan semula tuntutan
kehilangan kenderaan dengan
mewujudkan rangkaian yang luas dan
kunjungan penyiasat secara kerap ke
balai polis, serta latihan tetap pemeriksa
OD untuk memperbaiki prestasi kerja dan
menambah pengetahuan teknikal.
TINJAUAN UNIT AMANAH
MALAYSIA
Pada 2006, industri unit amanah Malaysia
sekali lagi mencatat pertumbuhan dua
angka dengan jumlah Nilai Aset Bersih
(NAV) dana di bawah pengurusan
meningkat 23.64% kepada RM121.77
bilion (2005: RM98.49 bilion).
Pada tahun dalam tinjauan, MAAKL
Mutual Bhd (MAAKL Mutual) menambah
RM225.85 juta kepada jumlah aset
di bawah pengurusannya, dengan
demikian meningkatkan lagi jumlah Nilai
Aset Bersih dana unit amanah di bawah
pengurusannya pada akhir Disember
2006 kepada RM920.05 juta (2005:
RM694.20 juta).
Dengan pertumbuhan
32.53% Nilai Aset Bersih, syarikat selama
tiga tahun berturut-turut telah mengatasi
kadar 23.64% pertumbuhan industri pada
2006.
Sebagai salah satu pengurus unit
amanah yang paling pesat berkembang
di Malaysia, MAAKL Mutual, yang boleh
dianggap baru berbanding pengurus
dana lain, telah melancarkan 2 dana
baru pada tahun dalam tinjauan, iaitu
Dana MAAKL Dividend dan MAAKL Al-
Umran.
Dengan tambahan 2 dana
baru ini, MAAKL Mutual kini menawarkan
rangkaian 11 dana biasa dan 5 dana
berciri Islam kepada pelaburnya setakat
Disember 2006, untuk membolehkan para
pelabur mempelbagaikan portfolio unit
amanah dan menyesuaikannya dengan
profi l risiko dan matlamat pelaburan
mereka yang unik.
Dana MAAKL Dividend adalah dana
deposit pendapatan ekuiti yang
bermatlamat memberikan pendapatan
ulangan tetap yang berpotensi lebih
tinggi daripada kadar deposit semasa,
disertakan dengan keupayaan
mendapatkan kenaikan nilai modal
dalam jangka masa sederhana
dan panjang.
MAAK Al-Umran pula
merupakan dana pendapatan seimbang
berciri Islam yang bertujuan untuk
menghasilkan peningkatan modal dalam
jangka masa sederhana dan panjang,
dengan sebahagian besar pelaburan
dalam ekuiti yang mematuhi prinsip
29

Tinjauan Operasi Perniagaan (bersambung)
Syariah dan instrumen pendapatan tetap
berciri Islam.
Pertumbuhan mengagumkan dana di
bawah pengurusannya dalam masa
3 tahun yang lalu telah membolehkan
MAAKL Mutual memberi sumbangan
positif kepada keputusan Kumpulan
pada tahun dalam tinjauan, dengan
pencapaian keuntungan sebelum cukai
sebanyak RM865.46 juta. Kumpulan
menjangkakan MAAKL Mutual akan
meneruskan aliran sumbangan positifnya
dalam tahun-tahun akan datang, sejajar
dengan pertumbuhan progresif industri
unit amanan.
Membina pasukan unit amanah yang
profesional adalah satu keutamaan
penting dalam rancangan MAAKL Mutual,
dalam usaha mencapai wawasannya
untuk menjadi syarikat unit amanah yang
paling dipercayai dengan menawarkan
produk dan perkhidmatan yang berkualiti
kepada semua rakyat Malaysia. Sebagai
sebahagian daripada usaha berterusan
MAAKL Mutual untuk meningkatkan kualiti
para penasihatnya, kontrak penasihat
yang tidak mencapai kriteria kualiti telah
dengan sengaja tidak diperbaharui
menjadikan bilangan ejennya berjumlah
1,015 orang (2005: 1,125 ejen) pada akhir
Disember 2006.
Selain melengkapkan para penasihat unit
amanahnya dengan alat berasaskan
pengetahuan yang perlu, khususnya
MAAKL Home Offi ce yang membolehkan
mereka menawarkan perkhidmatan lebih
baik dan profesional kepada pelanggan,
MAAKL Mutual telah mengambil langkah
seterusnya untuk membangunkan kursus
jualan berasaskan proses – Kursus MAAKL
Mutual’s Signature. Kursus ini bertujuan
untuk membolehkan penasihatnya
menggunakan pendekatan yang lebih
profesional dalam menjual unit amanah
dan mengamalkan perancangan
kewangan. Kursus MAAKL Mutual’s
Signature adalah berasaskan Proses
6 Langkah MAAKL Mutual, untuk
menjelaskan tentang perkhidmatan
kepada pelanggan; menganalisis
keperluan kewangan, matlamat dan
keutamaan pelanggan; memastikan
keupayaan pelanggan untuk membiayai
matlamat kewangan penting; memilih
protfolio model paling sesuai untuk
pelanggan; mencari dana unit amanah
paling sesuai; dan akhir sekali menilai dan
memantau prestasi pelanggan secara
tetap.
Sebagai sebahagian daripada usaha
berterusan MAAKL Mutual untuk
memudah dan menyenangkan
pelanggan melabur, MAAKL Mutual telah
mengadakan pakatan dengan Maybank
pada tahun 2006 untuk membolehkan
para pelabur membuat pelaburan
dalam talian menerusi Maybank2u.com
dan kemudian menerusi ATM (Mesin
Juruwang Automatik) Kawanku dan
Perbankan Telefon Kawanku.
Pada
awal 2007, MAAKL Mutual meluaskan
lagi kemudahan pelaburan dalam
talian dengan penyertaan laman web
perbankan dalam talian RHB. Di samping
itu, dalam usaha untuk menjadi syarikat
perancangan kewangan setempat,
MAAKL Mutual bekerjasama dengan OSK
Trustees Bhd (OSK) untuk menawarkan
perkhidmatan menulis wasiat kepada
pemegang unit amanahnya mulai bulan
Januari 2007.
Kumpulan yakin dengan masa depan
Bahagian ini. Pada 2007, MAAKL
Mutual akan melancarkan banyak
lagi dana baru, dan terus memberikan
tumpuan khusus kepada strategi jangka
panjangnya untuk membangunkan
penasihat yang beretika dan cekap.
Setakat bulan Januari 2007, syarikat telah
melancarkan dua dana baru, iaitu Dana
MAAKL-CM Flexi dan MAAKL Al-Ma’mun.
Pada bulan Februari 2007, MAAKL Mutual
melakar sejarah apabila jumlah Nilai Aset
Bersih dana di bawah pengurusannya
melepasi paras RM1 bilion.
TINJAUAN OPERASI
ANTARABANGSA
MAA International Assurance Ltd (MAAIA),
bahagian insurans dan pelaburan luar
pesisir Kumpulan yang berpangkalan
di Labuan, mencatat kenaikan 4.01%
pendapatan premium kasar kepada
RM64.53 juta (2005: RM62.04 juta).
Bagaimanapun, syarikat mengalami
kerugian sebelum cukai RM1.59 juta
berbanding keuntungan RM7.32 juta
pada 2005.
Kerugian ini sebahagian
besarnya adalah disebabkan tuntutan
lebih tinggi yang ditanggung daripada
serahan perniagaan insurans semula
am, pelupusan hutang yang sepatutnya
diterima daripada syarikat sekutu di
Thailand serta kerugian yang timbul
daripada penjualan pelaburan ini pada
tahun yang dilaporkan.
MAAIA juga merupakan syarikat
pegangan pelaburan bagi kepentingan
antarabangsa Kumpulan, termasuk
operasi yang sedia ada di Indonesia,
Filipina dan Thailand (pelaburan ini dijual
pada tahun dalam tinjauan). Penjualan
syarikat bersekutu di Thailand sebahagian
besarnya adalah disebabkan kos
kendalian yang tinggi dan pendapatan
rendah yang mengakibatkan kerugian
berterusan, disertakan persaingan
sengit dalam pasaran insurans hayat di
Thailand yang melibatkan kos bayaran
pengambilan ejen yang tinggi.
Pada November 2006, MAAIA
melancarkan pelan berkaitan pelaburan
yang baru, iaitu Pelan MAAIA-Dominion
Investment secara pakatan dengan
Protrust AG dari Switzerland. Pelan
pelaburan ini menawarkan empat dana
eksklusif – Dana MAAIA-Domain PX2
USD, MAAIA-Domain NX2 USD, MAAIA-
Domain PX2 Euro dan MAAIA-Domain
NX2 Euro. Dana yang unik dan inovatif
ini direka bentuk untuk menarik pelabur
yang sofi stikated dan berpengalaman,
juga profesional, dan memberi mereka
pulangan yang konsisten dan melebihi
pulangan purata dalam jangka masa
panjang.
Pada bulan Oktober 2006, Kumpulan
menerusi MAA International Investments
Ltd, anak syarikatnya yang lain di Labuan,
menjual kepentingan 15% dalam Hatton
National Bank, yang disenaraikan di Bursa
Saham Colombo, Sri Lanka, dengan sedikit
keuntungan modal kasar. Penjualan
strategik ini tepat pada masanya
memandangkan kekacauan politik yang
berpanjangan di Sri Lanka.
Pada bulan Oktober 2006, Kumpulan juga
memperolehi 42.86% kepentingan dalam
Columbus Capital Pty Limited (CCAU),
sebuah syarikat yang ditubuhkan di
Australia, melalui anak syarikat luar pesisir
yang lain. Aktiviti perniagaan utama
CCAU adalah pinjaman gadai janji runcit
dan pensekuritian pinjaman di Australia,
sejajar dengan hasrat Kumpulan untuk
mempelbagaikan aliran pendapatan.
Pada fasa permulaan tahun pertama,
CCAU telah mula menubuhkan sistem
pengurusan pinjaman, mengusahakan
rangkaian pengagihan bagi pengurus
gadai janji, menubuhkan garisan
pendanaan borong bersama institusiinstitusi
kewangan, mengenal pasti
sasaran pasaran serta membentuk
sebuah infrastruktur yang sesuai untuk
pertumbuhan dari segi jumlah perniagaan
bagi tahun-tahun operasi akan datang.
30

Chairman’s Statement
On behalf of the Board of
Directors, I am pleased to present
the Annual Report and Accounts
of the Group for the year ended
31 December 2006.
OPERATING ENVIRONMENT
For the whole year of 2006, the Malaysian economy continued to
sustain steady growth with Gross Domestic Product (GDP) expanded
by 5.9% (2005: 5.3%). Underpinned by stronger consumer sentiment
and sustained business confi dence, the private sector again was the
main contributor to the economic growth, led by strong expansion in
the services and agriculture sectors, and reinforced by the turnaround
in the mining and construction sectors.
Growth in the services sector was underpinned by increased fi nance
and business activities, particularly in the new growth areas, as refl ected
in the fi nance, insurance, real estate and business services sub-sector
which expanded by 7.1% in 2006 (2005: 5.7%). In particular, insurance
activity remained high underpinned by increases in the medical and
health insurance products as well as continued strong performance of
the investment-linked products.
Riding on the positive business environment as the Malaysian
Government and Bank Negara Malaysia (BNM) continued to adopt
supportive macroeconomic policies to position the economy for
sustainability and long-term growth, the Group, as a non-bank fi nancial
services group stands fi rmly poised to capitalize on the promising
economy development.
31

Chairman’s Statement (continued)
PERFORMANCE REVIEW
For the year under review, the Group’s
total operating revenue grew by 3.17% to
RM2.28 billion (2005: RM2.21 billion). The
Life Insurance Division’s gross premium
income increased marginally by 2.11%
to RM1.45 billion (2005: RM1.42 billion)
whereas the General Insurance Division
registered a slight decrease of 1.59% in
terms of total gross premium to RM452.64
million (2005: RM459.96 million).
The Group registered a lower profi t before
tax of RM3.11 million for the year under
review, compared to the profi t before
tax of RM41.13 million in 2005. The Life
Insurance Division and General Insurance
Division contributing a profi t before tax
of RM34.32 million (2005: RM20.23 million)
and RM5.58 million (2005: RM10.94 million)
respectively. The lower profi t in General
Insurance Division was due mainly to
higher claims ratio experienced during
the year under review and provision
made for certain non-performing loans.
The loss in Shareholders’ Fund was also
due mainly to provision made for nonperforming
loans by non-insurance
subsidiary engaged in credit business.
During the year under review, the Group
has implemented stringent provisioning
policies to control these segments of
operations.
In 2005, the Shareholders’ Fund recorded
higher other operating income mainly
due to a substantial fair value gain from
quoted equity investments in Sri Lanka by
non-insurance subsidiaries.
During the year under review, the
General Insurance Division experienced
an increase in claims ratio to 70.87% from
59.02% in 2005. The increase was mainly
due to the management’s decision
to increase the confi dence level of
incurred but not reported claim reserve
(IBNR) from 50.00% to 65.00% for the local
insurance subsidiary, a gradual step-up
increase in anticipation of Bank Negara
Malaysia’s proposal to implement Risk
Based Capital Framework in 2009.
As at 31 December 2006, the Group’s
total assets stood at RM7.17 billion, an
increase of 9.47% over 2005 of RM6.55
billion.
BUSINESS OPERATIONS REVIEW
For the year under review, the Group
continues to remain focused in its four
core operations, namely Malaysian Life
Insurance Operations, Malaysian General
Insurance Operations, Malaysian Unit
Trust Operations and the International
Operations. Details of their performance
are separately discussed in the attached
pages.
DIVIDENDS
For the year ended 31 December 2006,
the Board of Directors has recommended
the payment of a fi rst and fi nal taxexempt
dividend of 2% (2005: 10%)
to reward all the shareholders for their
support and confi dence to the Group.
The Group will strive to maintain an
appropriate balance of providing
shareholders with sustainable cash
returns from dividends while conserving
adequate funds for reinvestment that is
necessary to enhance future profi tability
and the value of the Group.
UPDATES ON RECENT CORPORATE
PROPOSALS
The Group is pleased to provide the
following updates:
(a) MAAH announced on 29 September
2004 the corporate proposal on
renounceable rights issue of up to
152.18 million New Irredeemable
Preference Shares of RM1.00 each
(IPS) (Rights IPS) together with up
to 152.18 million free detachable
Ordinary Shares of RM1 each
(Ordinary Shares) (Bonus Shares) and
up to 152.18 million free detachable
Warrants (Warrants) on the basis of
one (1) Rights IPS with one (1) free
detachable Bonus Share and one (1)
free detachable Warrant for every
one (1) existing Ordinary Share held
in the Company at an entitlement
date to be determined later (Rights
Issue of IPS). The Rights Issue of IPS
was approved by the shareholders
of the Company at the Extraordinary
General Meeting held on 22 February
2005.
Given the uncertain sentiments in the
Malaysian equity market prevailing
then, MAAH with the approval of
32

Chairman’s Statement (continued)
MAA, always caring for the customer.
the Securities Commission (SC)
had extend the completion of
the proposed Rights Issue of IPS
twice, fi rstly from 3 June 2005 to 31
December 2005 and subsequently
from 1 January 2006 to 30 June 2006.
On 3 May 2006, MAAH announced
that after taking into consideration
the current market sentiments and
the market performance of the
ordinary shares of MAAH, it has
decided to abort the proposed
Rights Issue of IPS.
Notwithstanding the abortion of
the proposed Rights Issue of IPS, the
Board of Directors on 3 May 2006
announced that MAAH will proceed
with the Proposed Bonus Issue of up
to 152.18 million new ordinary shares
of RM1 each as fully paid on the
basis of one (1) Bonus Share for every
one (1) existing ordinary share held
to the registered shareholders of
MAAH at the close of business on an
entitlement date to be determined
and announced later (Proposed
Bonus Issue).
The Proposed Bonus Issue will be
issued via capitalization of up to
RM152.18 million from the following:
(i) up to RM11.74 million from share
premium account ; and
(ii) up to RM140.44 million from
retained earnings.
The Proposed Bonus Issue was
approved by the shareholders
of MAAH at the Annual General
Meeting held on 21 June 2006.
On 19 July 2006, MAAH submitted an
Application for listing of additional
ordinary shares to be issued pursuant
to the Proposed Bonus Issue to
Bursa Malaysia Securities Berhad
(Bursa Securities). The approval was
obtained on 1 August 2006 from Bursa
Securities. MAAH subsequently on 9
August 2006 announced 25 August
2006 as the Bonus Share entitlement
date.
152.18 million new ordinary shares of
RM1 each were subsequently allotted
on 8 September 2006 pursuant to the
Proposed Bonus Issue.
(b) On 4 August 2006, MAAH
announced the Proposed Issuance
of Commercial Papers (CP) and/
or Medium Term Notes (MTN)
Programme of up to RM200 million
(“Proposed Programme”).
The Proposed Programme will
comprise the issuance of CP with
tenors ranging from one (1) month to
twelve (12) months and/or MTN with
tenors of more than one (1) year but
not exceeding seven (7) years.
The proceeds from the Proposed
Programme will be used in relation
to fi nancing MAAH’s investment in
Takaful business, to repay certain
existing bank borrowings of MAAH
and its subsidiaries, to fi nance
redemption of its existing RM120
million Serial Fixed Rate Bonds
maturing on 21 August 2007, to
pre-fund the debt service reserve
account to be established for
the purposes of the Proposed
Programme and to fi nance working
capital of MAAH.
For the Proposed Programme,
based on the Group’s stable
fi nancial performance and prudent
management, Rating Agency
Malaysia (RAM) has assigned
respectively long- and short-term
ratings of A2 and P1 to MAAH.
Approval for the Proposed
Programme was obtained on 28
August 2006 from the SC.
On 5 December 2006, MAAH
submitted an application to the SC
for the following variations to the
principal terms and conditions of the
Proposed Programme:
(i) to secure the issuance under the
Proposed Programme by a bank
guarantee facility from DBS Bank
Ltd, Labuan Branch (DBS Bank)
up to the maximum aggregate
principal amount of the United
States Dollars equivalent to
RM200 million; and
(ii) to vary the utilization of proceeds
of the Proposed Programme,
where among others the MAAH’s
investment in Takaful business
will be fi nanced from internally
generated fund
With the strength of the bank
guarantee from AAA- rated DBS
Bank added onto the Proposed
Programme, RAM has assigned
AAA(bg) rating to the fi rst issuance of
up to RM200 million with a tenure of
up to 5 years of Medium Term Notes.
33

Chairman’s Statement (continued)
MAJOR NEW DEVELOPMENTS
BRAND EQUITY
QUALITY FOCUS
INVESTMENTS
The SC has via its letter dated 22
December 2006 approved the
above stated variations.
On 8 January 2007, MAAH
successfully issued RM200 million
nominal amount of Medium Terms
Notes up to a tenure of 5 years.
MAJOR NEW DEVELOPMENTS
(a) MAA Takaful Berhad
On 3 March 2006, MAAH received BNM’s
approval for a new Takaful license for
the joint-venture of MAAH and Solidarity
Company BSC (C) (Solidarity), Bahrain.
Solidarity is a company incorporated
under the laws and regulations of the
Kingdom of Bahrain and engaged in
Takaful business. It was set up in direct
response to the growing demand for
Takaful products across the Middle
Eastern region. Solidarity operates in full
accordance with the guiding principles
of Syariah and provides a full range of
Family and General Takaful products.
With over US$100 million in capital
assets, Solidarity is the largest insurance
company (in term of paid-up capital) in
the Kingdom of Bahrain and the largest
capitalized Takaful company in the
world.
On 21 February 2006, a Joint-Venture
Agreement was signed with Solidarity to
form a joint-venture company to carry
on the Takaful business in Malaysia. The
joint-venture company will have a paid
up capital of RM100 million with equity
interest of MAAH and Solidarity in the
proportion of 75% and 25% respectively.
On 2 May 2006, a new subsidiary
company namely MAA Takaful Berhad
(MAA Takaful) was incorporated
with an authorised share capital of
RM150,000,000 comprising 150,000,000
ordinary shares of RM1.00 each of which
RM2.00 have been issued and fully paidup.
MAA Takaful has on 16 November 2006
submitted an application to the SC for
the increase in its paid up capital.
The SC has via its letter dated 15 January
2007 approved the application.
Todate, both MAAH and Solidarity have
put in their respective share of equity
capital into MAA Takaful.
The Group targets the Takaful business to
commence operations in third quarter of
2007.
The Group expects the joint-venture
Takaful company to breakeven in its fi rst
few years of operations leveraging on
MAA’s strong agency network of which
about 40% or 7,000 of its life agency
force are Bumiputra agents, coupled
with its existing infrastructure which will
help to attain a low-fi x cost.
Lastly, the Group will capitalize on its
takaful collaboration with Solidarity as
a springboard into the global markets,
especially the Islamic nations in the
Middle East in the near future.
(b) Columbus Capital Pty Limited
On 13 September 2006, MAA
International Investment Ltd (MAAII), a
wholly-owned subsidiary of the Group
acquired a shelf company by the name
of Columbus Capital Singapore Pte
Ltd (CCS), a company incorporated
in Singapore which act as a special
purpose vehicle for any future investment
in the Group.
On 22 September 2006, CCS entered into
a conditional subscription agreement
with Columbus Capital Pty Limited
(CCAU) to subscribe up to 20.0 million
Series A Preference Shares at an issue
price of AUD1.00 each, representing up
to 50% equity interest in CCPL for a total
cash consideration of AUD20.0 million
or RM57.0 million equivalent (Proposed
Subscription). Concurrently, CCS
together with the founders of CCAU,
had entered into a shareholders’ deed
to regulate their respective rights and
obligations as members of CCAU. CCAU
was incorporated in Australia.
The Proposed Subscription, in essence,
comprise two (2) stages:
(i)
Stage 1 – subscription by CCS of
15.0 million Preference Shares at an
issue price of AUD1.00 per share,
representing 42.86% equity interest
in CCAU for total cash consideration
of AUD15.0 million, is expected to be
completed by October 2006;
(ii) Stage 2 – subscription by investor(s)
or CCS of 5.0 million Preference
Shares at an issue price of AUD1.00
34

Chairman’s Statement (continued)
per share, representing 12.5% of the
enlarged equity interest in CCAU for
total cash consideration of AUD5.0
million, will be completed on or
before 300 calendar days of the
completion of stage 1, which will
be tentatively completed in August
2007.
The cash consideration of up to AUD20.0
million will be satisfi ed by way of bank
borrowing and/or internal generated
funds of the Group.
The proposed subscription will pave the
way for the Group to venture into the
business of retail mortgage lending and
loan securitization in Australia, in line
with the Group’s aspiration to diversify its
income stream.
Stage 1 of the Proposed Subscription was
completed on 6 October 2006.
BRAND EQUITY
The Group will continue with its philosophy
of brand equity to maintain the strong
corporate image that has developed todate.
This image has been the mainstay
of our continued growth, and has been
the pillar that has kept our clients and our
agents loyal to us.
In this respect, ownership of our own
offi ce buildings throughout Malaysia
with excellent visibility, television
commercials, highway billboards and
newsprint advertisements, as well as
concerted public relations activities and
charity programmes have provided our
clients and agents with the confi dence
to continue to place their trust in our
Group.
Our corporate tag-line is well recognized,
“Say Yes to MAA. Say Yes To Solid Financial
Security”.
QUALITY FOCUS
The Group is also proud to report that the
Malaysian insurance operation has for
the last seven years been able to retain
its ISO 9001 quality status. Its on-going
focus on maintaining tip-top IT systems
and internal processes, staff training
and education programs, coupled with
the adoption of Six Sigma programme
since 2005 in its Malaysian Insurance
operations, have help to ensure that our
clients and agents get the best possible
service. Only through a focused effort on
quality, can the Group guarantee our
success in the future.
INVESTMENTS
Following the better performance in the
Kuala Lumpur Stock Exchange (KLSE)
towards the second half of the year,
the Group’s total investment income
increased by 68.32% to RM391.84 million
(2005: RM232.80 million), after write
back of provision for diminution in value
of quoted investments of RM148.00
million during the year (2005: a provision
made for diminution in value of quoted
investments of RM90.96 million). Fixed
income investments continue to accord
for the bulk of the investment portfolio
representing 82.61% of total investment
income.
The Group will continue its conservative
investment philosophy that emphasises
capital preservation, profi tability and
consistent income fl ows to hedge
against market volatility. Fixed income
investments are expected to remain
the core portfolio asset, with corporate
bonds being the preferred instrument
in view of their relatively better yields
compared to fi xed and cash deposits.
Moving forward we may reassess
the investment portfolio of Life nonparticipating
fund and the General fund
by reducing the quoted equity portfolio
to shelter the Group’s earnings against
the volatility of the equity market.
Nevertheless, the Group will constantly
review and revise its investment
strategies to take advantage of the
expected strong economic and fi nancial
environment in the coming years.
INFORMATION TECHNOLOGY
In line with MAA’s 5 year Information
Technology (IT) Strategy Plan formulated
in 2005, with the main aim to support
future business requirements, MAA
has successfully rolled out a few major
systems during the year under review:
(1) Consultant Management Sales
System (CMSS)
This application system supports Life
consultants by:
- increasing the consultant’s
productivity with the provision of
necessary tools and up-to-date
reports
35

Chairman’s Statement (continued)
- enhance the quality of services
to customers and building more
client relationship
- provide online communication
interface with MAA
(2) Life e-Claim System
This workfl ow based system simplifi es
mutual processing into computerised
processing by:
- cutting down tedious manual
document searching
- tracking status of claim fi le
- providing online approval
interface for rapid claim
processing turnaround.
(3) New General Insurance System
Phase 2
The system was implemented from
a “customer-centric” focus with
fully computerised processes to
improve monitoring and reporting
capabilities
(4) Online Motor Policy Printing
The online motor policy printing
allows agents who are connected
online to issue motor electronic
cover notes and print motor policies
on the spot
VALUATION OF THE MALAYSIAN
INSURANCE BUSINESS
As in prior years, the Group has engaged
an external actuary to compute the
Appraisal Value of the Malaysian Life
Insurance Business, following the same
valuation technique used internationally
to value life insurance businesses. The
Appraisal Value is the discounted cash
fl ow of profi ts to the shareholder, from
policies sold in the past (embedded
value) and from future policy sales
(structural value).
Based on the Appraisal Value, as set
out on page 41 to 44, the Malaysian life
insurance portfolio is assigned three (3)
values, based on assumed future growth
scenarios, namely RM2.09 billion, RM2.63
billion and RM3.37 billion.
If one were to value the Malaysian
general insurance business at 85% of
2006 gross premium income of RM413.10
million, this would value the Division at
RM351 million.
The combined life and general
insurance divisions are thus valued at
RM3.73 billion (Full Valuation), RM2.99
billion (Mid Valuation) and RM2.45 billion
(Low Valuation).
The Board is constantly monitoring this
valuation for the Malaysian insurance
operations as it will be used as the base
for any future merger or acquisition
negotiations.
It is interesting to note that if MAAH
were to take on the same valuation
as its Malaysian insurance operations,
the value for the Group’s share price
would be substantially higher than the
prevailing share market price of RM1.76
per share as at 31 December 2006. If
one included the year-end Shareholder
Fund of MAAH of RM368.3 million,
the corresponding value for Group’s
shares would be RM13.47 per share
(Full Valuation), RM11.03 per share (Mid
Valuation) and RM9.26 per share (Low
Valuation).
CORPORATE SOCIAL
RESPONSIBILITY
The Group also remains committed to
its quest to be a responsible and caring
citizen. Towards this end, the Group has
set up MAA Medicare Kidney Charity
Fund since 1994, with the aim to provide
for cheaper kidney dialysis treatment cost
and adopted The Budimas Charitable
Foundation in 2002 with the objective of
providing welfare to the under-privileged
children and the poor.
The various activities carried out by MAA-
Medicare Kidney Charity Fund and The
Budimas Charitable Foundation during
the year under review are separately
discussed in the attached pages.
PROSPECTS
BNM reported in its Annual Report 2006
that the Malaysian economy in 2007 is
expected to remain favourable through
sustained domestic demand and
continued expansion in the investment
activity, despite some moderation in
the global economic conditions. The
implementation of the Ninth Malaysia
Plan projects which have already
commenced in the fourth quarter of
2006 further reinforced this.
The Group expects 2007 to be even more
challenging than ever in the increasing
36

Chairman’s Statement (continued)
INFORMATION TECHNOLOGY
VALUATION OF THE MALAYSIAN INSURANCE BUSINESS
CORPORATE SOCIAL RESPONSIBILITY
PROSPECTS
ACKNOWLEDGEMENT AND APPRECIATION
competitive business environment and
the unrelenting pace of liberalisation of
the Malaysian fi nancial services industry
with the implementation of the Financial
Sector Masterplan by BNM.
Embracing all these challenges, the
Group will continue its initiative to
invest in the latest technologies to
further enhance operations effi ciency,
strengthening distribution system, human
resource and agency development
and developing innovative products to
improve further the quality of services to
customers.
support, confi dence and trust they have
placed in us.
Finally, I would like to thank my fellow
Board members for their stewardship
and contribution to the Group.
The Group is confi dent with its extensive
network of branches, innovative products
and services, strong distribution channels
through agency and bancassurance
and lastly its strong MAA Brand, will well
position the Group to overcome the
challenges in its path to achieving better
results in the years ahead.
ACKNOWLEDGEMENT AND
APPRECIATION
On behalf of the Board of Directors, I
would like to thank the management
team and staff for their continued
commitment, dedication and
contributions to ensure the continued
growth and success of the Group.
I would also like to take this opportunity
to extend our appreciation to the
regulatory bodies for their continued
guidance and support; to our valued
customers, agents, business associates
and the shareholders for their invaluable
TUNKU TAN SRI ABDULLAH IBNI
ALMARHUM TUANKU ABDUL RAHMAN
Chairman
37

Business Operations Review
MALAYSIAN
BUSINESS REVIEW
MALAYSIAN LIFE INSURANCE
REVIEW
The Life Insurance Division’s total
premium income increased slightly
by 0.72% in its total premium income
to RM1.40 billion (2005: RM1.39 billion),
with sales largely from single premium
business, in particular endowment and
investment-linked plans, despite facing
stiff challenges from its competitors. The
sustainable premium was attributed to
MAA’s extensive network of branches
countrywide (currently numbering 76),
its sizeable agency force that underpin
its distribution capacity and brand
awareness. The current low interest
rate regime and the shift in consumer
preference from plain protection to
savings/investments type of policies have
contributed to the sales of investmentlinked
products and endowment plans.
In terms of single and annualised new
business premiums, a measure of
the year’s new sales activity, the Life
Insurance Division has registered a
marginally growth of 3.97% to RM934.10
million (2005: RM898.4 million).
Despite the almost constant total
premium income, the Life Insurance
Division recorded a higher Profi t Before
Tax from RM12.25 million in 2005 to
RM21.96 million in 2006. The higher profi t
before tax in 2006 was due mainly to
reversal of provision for diminution in
value of investments which was resulted
from the better performance of stock
market in the second half of 2006, albeit
an increase in cash bonus payment and
medical claims from medical policies.
Notwithstanding the transfer of profi t to
Shareholders’ Fund account, the overall
Life Insurance Fund Surplus, remains
healthy with a cumulative surplus carried
forward of RM482.88 million as at 31
December 2006.
In its continuing effort on agency
training, MAA has introduced the
Chartered Insurance Agency Manager
(CIAM) programme to its life insurance
agents in 2006 with the objective to
improve agency management skills,
responsibilities of a leader, agency
mission and goal, recruiting techniques
and processes, supervision and training.
MAA believes the agency force should
reinvent themselves so that they are
always ahead of the pack.
As at end of December 2006, MAA’s
agency force stood at 10,671 (2005:
12,773), a decrease after embarked on
a clean-up exercise of systematically
purging non-active agencies during the
year. Moving forward, MAA’s primary
emphasis will be to grow its agency
force by recruiting new consultants
and leaders to further strengthen its
distribution channels.
The Division has noted the public’s
changing demand trend towards
investment-linked plans. The Group
expects this trend to continue in the
future, and is currently planning even
more exciting investment-linked plans to
meet this ever-increasing demand.
During the year, several new plans were
launched that include the investmentlinked
Maaster Capital Guaranteed Plan,
MAA Global Asset Capital Guaranteed
Plan, personal accident plan – Senior
Gold, ordinary life plan - 20 PayMaster
Guaranteed, Freedom 20 Star and
SmartLife Limited Pay.
MAA places great importance on
meeting customers’ satisfaction. It
will continue to maintain its strategies
and the various initiatives that it had
already embarked on, including
the implementation of a Customer
Satisfaction Index (CSI) to enhance
and raise the quality of our services to
customers. Towards this end, in 2006,
MAA has set up Idea Factory Project
Team with the objective of facilitating
its staff to generate new ideas for
excellent customer services, develop
innovative products and improve
operating effi ciency and productivity
via organisational innovation using
specifi c processes, thinking and business
methodologies.
MALAYSIAN GENERAL INSURANCE
REVIEW
The General Insurance Division recorded
a slight drop of 2.63% in gross written
premium to RM413.10 million (2005:
RM424.25 million), albeit a lower premium
growth of 3.23% in the General Insurance
Industry in 2006 (2005: 7.80%).
Motor vehicle business premiums
decreased by 6.58% to RM194.30 million
(2005: RM207.99 million) mainly due to
slower vehicle sales in the motor industry
that has impeded this line of business.
However, motor cycle business premium
increased by 1.76% to RM42.20 million
(2005: RM41.47 million). Furthermore,
the stricter underwriting strategies
implemented since 2004, have and will
continue to limit growth in this segment
albeit increasing the quality of motor
portfolio. For the non-motor portfolios,
the premiums increased marginally by
1.03% to RM176.60 million (2005: RM174.80
million).
Motor vehicle business continues to be
the dominant class, with a portfolio share
of 47.03% of the total gross premium
income of the Division (2005: 50.35%). The
Motor cycle business share has increased
from 9.77% in 2005 to 10.21%. Non-motor
38

Business Operations Review (continued)
portfolio share have increased, with Fire
Insurance, Miscellaneous business and
Marine business accounting for 15.45%,
20.98% and 6.32% respectively (2005:
15.31%, 22.18% and 4.82%).
During the year under review, the claim
ratio increased to 71.83% (2005: 62.18%),
mainly from higher claims recorded
by the motor vehicle and motor cycle
business.
Despite the higher claims registered, the
Division recorded a lower Loss Before Tax
of RM6.33 million from a loss of RM10.60
million in 2005. The improvement was
due reversal of provision for diminution
in value of investments during the year
which was resulted from the better
performance of the stock market in
second half of 2006, despite an increase
in claims ratio to 71.83% from 62.18% in
2005. The increase was mainly due to
the management’s decision to increase
the confi dence level of incurred but
not reported claim reserve (IBNR) from
50.00% to 65.00% for the local insurance
subsidiary, a gradual step-up increase in
anticipation of Bank Negara Malaysia’s
proposal to implement Risk Based Capital
Framework in 2009.
Since 2001, the General Insurance
Industry has made proposals to the
regulators to rebalance the motor
vehicle insurance premium tariff, which
was last revised in 1978, or 28 years ago.
A revised tariff is needed to meet the
ever increasing cost of vehicle spareparts,
vehicle theft frequencies and
higher court awards. The proposed new
tariff take into account new factors
which were previously ignored, namely:
geographical location, sex, age and
claims history of the driver, and details of
the vehicle’s make and model. To-date,
a decision on this matter is still pending.
In our continuing efforts to provide
better services to our customers, The
Division has rolled out the Accident
Assistance Scheme in 2006, where on
the scene assistance will be rendered
for all called-in accidents and collisions,
in addition to the existing MotorClub
Breakdown Assistance service
nationwide. At the same time, the
Division has implemented the provision
of free of charge comprehensive fi re
risk assessment and prevention services
to its fi re policyholders. This will help fi re
policyholders to enjoy better premium
rates with improved and effective fi re
prevention systems and concurrently,
help to mitigate incidence of fi re
occurrence.
Going forward, the Division will plan to
increase its non-motor portfolio with
focus on the profi table classes mainly fi re,
marine cargo, foreign workers and lastly
contractor’s all risks and engineering to
take advantage of the infrastructure
developments under the Ninth Malaysia
Plan and other mega projects. On the
same note, the Division will enhance its
claims management strategies which
amongst others include internet based
workfl ow system on Motor OD (own
damage) claims, maintaining the role
of New Direct and Early Settlement
Department in managing and settling
new and small Motor Third Party Bodily
Injury claims, intensify the recovery of
motor theft claims by creating a wide
recovery network and frequent visits
to police stations by investigators, and
regular training OD examiners for the
improvement in work and technical
knowledge.
MALAYSIAN UNIT TRUST REVIEW
In 2006, the Malaysian unit trust industry
again registered a double digit growth
with the total Net Asset Value (NAV) of
funds under management expanded by
23.64% to RM121.77 billion (2005: RM98.49
billion).
During the year, MAAKL Mutual Bhd
(MAAKL Mutual) added RM225.85 million
to its total assets under management,
raising further the total Net Asset Value
of unit trust funds under its management
as at end December 2006 to RM920.05
million (2005: RM694.20 million). With this
growth of 32.53% in Net Asset Value, the
company for the third consecutive year
has outperformed the industry growth of
23.64% in 2006.
MAAKL Mutual, being one of the
Malaysia’s fastest growing unit trust
managers, although the company is
relatively young compared to other
fund managers, launched 2 new funds
during the year, namely MAAKL Dividend
Fund and MAAKL Al-Umran. With the
addition of these 2 new funds, MAAKL
Mutual now offers a wide range of 11
conventional funds and 5 Islamic funds
for its investors to build a well-diversifi ed
unit trust portfolio which matches their
unique risk profi le and investment goals
as at end December 2006.
MAAKL Dividend Fund is an equity
income deposit fund which aims to
provide steady recurring income that is
potentially higher than prevailing deposit
rates coupled with attaining medium
to long-term capital appreciation.
On the other hand, MAAKL Al-Umran
is an Islamic balanced income fund
seeks to produce medium to long-term
capital appreciation, with investment
predominantly in Syariah-compliant
equities and Islamic fi xed income
instruments
With its impressive growth in funds
under management over the last 3
years, MAAKL Mutual has turnaround
to contribute positively to the results of
the Group during the year with a profi t
before tax of RM865.46 million. The Group
expects MAAKL Mutual to continue with
its positive contribution trend in the years
ahead, in line with the progressive growth
of the unit trust industry.
Building a professional unit trust force is
at the forefront of MAAKL Mutual’s plans,
to fulfi ll its vision to be the most trusted
unit trust company by providing quality
products and services for all Malaysian.
As part of MAAKL Mutual’s continuous
effort to improve the quality of its advisers,
it has deliberately not renewed those
advisors who do not meet the quality
criteria, with this the agency force stood
at 1,015 agents (2005: 1,125 agents) as at
end December 2006.
Beside equipping its unit trust advisers with
the necessary knowledge-based tools,
namely MAAKL Home Offi ce that enable
them to offer a higher level of service
and professionalism to clients, MAAKL
has embarked further in developing a
process-based selling course – MAAKL
Mutual’s Signature Course to enable its
advisers to be more professional in their
approach to selling unit trusts and as well
practising fi nancial planning. The MAAKL
Mutual’s Signature Course is set on
the MAAKL Mutual 6-Step Process that
involves making services known to clients,
analyse client’s fi nancial needs, goals
and priorities, ascertain the client’s ability
to fund the key fi nancial goal (s), choose
the most appropriate model portfolio (s)
for clients, look for the most appropriate
unit trust funds and lastly evaluate and
monitor client’s performance regularly.
As part of MAAKL Mutual’s continuous
effort to make investing with MAAKL easy
and convenient, in 2006 it has tied-up with
Maybank to enable investors to make
investment online through Maybank2u.
com and later through Kawanku ATM
(Automated Teller Machine) and
Kawanku Phone Banking. In early part
of 2007, MAAKL Mutual has further
expanded the online investment facility
to include RHB’s online banking website.
Additionally, in a move to be a one-stop
fi nancial planning company, MAAKL
39

Business Operations Review (continued)
Mutual has tied up with OSK Trustees Bhd
(OSK) by offering will-writing services to its
unitholders beginning January 2007.
The Group is optimistic about the future
of this division. In 2007, MAAKL Mutual
will be launching a variety of new funds,
and will continue to focus exclusively
on its long term strategy to develop
advisers who are ethical and competent
in their dealings. As at January 2007, the
company further launched two new
funds, namely MAAKL-CM Flexi Fund and
MAAKL Al-Ma’mun. In February 2007,
MAAKL made its historical milestone
with total Net Asset Value of funds under
management surpassed RM1 billion.
INTERNATIONAL OPERATIONS
REVIEW
MAA International Assurance Ltd
(MAAIA), the Labuan based offshore
insurance and investment arm of the
Group, recorded an increase of 4.01%
in gross premium income to RM64.53
million (2005: RM62.04 million). However,
the company recorded a loss before tax
of RM1.59 million compared to a profi t of
RM7.32 million in 2005. The loss was due
mainly to higher claims experience from
ceded general reinsurance business,
write off of debts due from associated
company in Thailand coupled with loss
arising from the disposal of this investment
during the year.
and professional investors, to provide
them with consistent and above average
returns over the long term.
In October 2006, the Group via MAA
International Investments Ltd, an offshore
subsidiary company in Labuan, disposed
its 15% interest in Hatton National Bank,
which is listed on the Colombo Stock
Exchange, Sri Lanka with some gross
capital gain. The strategic disposal was
timely in view of the prolonged political
unrest in Sri Lanka.
In October 2006, the Group has also
acquired a 42.86% interest in Columbus
Capital Pty Limited (CCAU), a
company incorporated in Australia, via
its other offshore subsidiary company.
CCAU’s principal business activities
are retail mortgage lending and loan
securitization in Australia, in line with the
Group’s aspiration to diversify its income
stream. In its fi rst year start-up phase,
CCAU has embarked in establishing
loan management system, develop
distribution network of mortgage
managers, establish wholesale funding
lines with fi nancial institutions, identify
target markets and set-up a scaleable
infrastructure for growth in business
volumes in subsequent years of
operations.
MAAIA is also the investment holding
company for the Group’s international
interest, which includes existing
operations in Indonesia, Philippines and
Thailand (the investment was disposed
during the year). The disposal of the
associated company in Thailand during
was mainly due to high running costs
and low revenue income which resulted
in continuous losses coupled with intense
market competition in the life insurance
companies in Thailand in offering high
agency compensation buy-out to recruit
agents.
In November 2006, MAAIA launched
new investment-link plan, namely
MAAIA-Dominion Investment Plan in
partnership with Switzerland’s Protrust AG.
The investment plan offers four exclusive
funds – MAAIA-Domain PX2 USD Fund,
MAAIA-Domain NX2 USD Fund, MAAIA-
Domain PX2 Euro Fund and lastly MAAIA-
Domain NX2 Euro Fund. These unique
and innovative funds are designed to
appeal to sophisticated, experienced
40

Appraisal Value On The Life Insurance Business Of
Malaysian Assurance Alliance Berhad
12 April 2007
The Directors
Malaysian Assurance Alliance Berhad
22nd Floor, Menara MAA
12, Jalan Dewan Bahasa
50460 Kuala Lumpur
Dear Sirs
Introduction
We have been engaged by Malaysian Assurance Alliance Berhad (“MAA” or “the Company”) to perform an appraisal valuation of its life
insurance business as at 31 December 2006. The appraisal valuation was carried out based on a set of assumptions that the management
of MAA consider reasonable and realistic, taking into consideration the past performance of MAA, its operating structure, the economic
growth of Malaysia and the stage of development of the life insurance industry in Malaysia.
Assumptions
MAA has projected a total new business premium for the year 2007 of RM934 million. This includes RM560 million in premiums from the
Single Premium Fixed Dividend Endowment Plan. Premium received for this FDE plan amounted to RM577 million in 2006.
The following set of assumptions has been used in the appraisal valuation:
i) Base year total new business (2007)
Conventional Business
- Par
- Non Par
- FDE
Investment Linked Business
- Regular Premium
- Single Premium
Project New Business
Growth in 2006
-19%
-6%
-3%
Projected Premium
(RM million)
Total Projected New Business in 2007 934
20%
20%
19
135
560
65
155
41

Appraisal Value On The Life Insurance Business Of
Malaysian Assurance Alliance Berhad (continued)
ii) Subsequent New Business Growth (2008 onwards)
The range of expected subsequent new business growth is as follows:
Year Range of expectation
Scenario A
Low
Scenario B
Medium
Scenario C
High
2008-2016
2016 onwards
10% p.a.
3% p.a.
15% p.a.
3% p.a.
20% p.a.
3% p.a.
iii) Investment returns Par Plans 7.0% p.a.
Non Par Plans (excluding FDE)
6.5% p.a.
FDE Plans (in-force)
5.5% p.a.
iv) Discount rates Business in force 9% p.a.
New business
12% p.a.
Appraisal Value
Due to the long-term nature of the life insurance business, reserves (the life fund) are set aside to meet future liabilities. Profi ts are only
expected to emerge gradually over the years. An Appraisal Value takes into account the expected future cash fl ows and discounts
future surpluses at a suitable rate. It is equal to the sum of the Embedded Value and the Structural Value.
The Embedded Value is the assessment of the present value of distributions that will accrue to the shareholders over the future lifetime of
all existing policies.
The Structural Value is the assessment of the life business’s ability to generate profi ts from its assets – as evidence by past performance
– by continuing to write new business on profi table terms. It incorporates, among others, the value of the existing agency structure. It is
based on the assumption that the projected mix of new business in 2007 and the profi tability thereof is representative of the future fl ow of
new business. Any change in the mix of new business (for example an increase in investment linked business at the expense of traditional
business) would affect the valuation. It is also heavily dependent on the capitalization factor used to gross up the value of one year’s
business.
42

Appraisal Value On The Life Insurance Business Of
Malaysian Assurance Alliance Berhad (continued)
The Appraisal Value of MAA’s life insurance business as at 31 December 2006 is as follows (RM million):
Range of expected business growth rate Scenario A Scenario B Scenario C
Embedded Value:
Conventional
Investment Linked
414.49
186.83
414.49
186.83
414.49
186.83
Total Embedded Value 601.32 601.32 601.32
Structual Value:
Conventional
Investment Linked
872.27
622.18
1,187.26
846.85
1,619.12
1,154.89
Total Structual Value 1,494.45 2,034.11 2,774.01
Appraisal Value:
Conventional
Investment Linked
1,286.76
809.01
1,601.75
1,033.68
2,033.61
1,341.72
Total Appraisal Value 2,095.77 2,635.43 3,375.33
The Appraisal Value has been calculated based on the above set of assumptions of new business growth and the Company’s expected
future experience regarding agency costs, termination rates, claim payments, management expenses, taxation and bonuses that are
consistent with the Company’s past experience.
The Appraisal Value excludes the value of the Shareholders’ Fund and the General Insurance Business of the Company.
Reliance
In preparing this report, we have relied on an extensive range of information, qualitative and quantitative, supplied by the Company. We
have relied where possible on written materials including descriptive, fi nancial and statistical information, and we have supplemented
our understanding by interviews and other discussions with executives of the Company. While we have reviewed all information supplied
to us for reasonableness and consistency, we have relied on the Company for accuracy and completeness of all information supplied.
We have relied on the Company for assumptions as to the expected future growth of its business.
The following table sets out the Company’s actual sales performance against that projected/targeted for each year.
% of Sales Target Achieved 2006 2005 2004 2003 2002
Ordinary Life (excluding FDE) 81% 79% 122% 74% 80%
Investment Linked 119% 56% 122% 23% 67%
43

Appraisal Value On The Life Insurance Business Of
Malaysian Assurance Alliance Berhad (continued)
Comments on Results
The Appraisal Value of the Company has reduced by 10% over the year to RM 2,096 million (at 9% base discount rate on Scenario Growth
A) due to the change in the mix of new business projected.
The Embedded Value of the Life Fund has increased by 11% or RM60 million. This increase is contributed mainly due to new business
achieved in 2006. In comparison, the Structural Value has reduced by 16% compared to last year. This is due to the lower levels of new
business projected for conventional business in favour of investment-linked business. Further, within this business, there is a heavier weight
on the single premium business which carries a thinner profi t margin compared to regular premium business.
There is currently a Quota Share reinsurance arrangement with MAA International Assurance Ltd for some lines of business secured from
2000. This has been factored in our calculations.
Limitations
This report has been prepared at the request of the Directors of MAA for the purpose of disclosure of the Company’s Appraisal Value in
the Annual Report of MAA and MAA Holdings Berhad respectively and it may not be used for any other purpose.
This report has been prepared on the basis of the information provided to us and our understanding of the business of MAA. Nevertheless,
the reader should be aware that future events cannot be predicted with certainty and, as a result, deviations from any fi nancial estimates
referred to in this report and pertaining to the future are normal and are to be expected.
The Appraisal Value has been calculated based on the current statutory reserving and capital requirements. In particular, that the
solvency capital required for the whole life fund continue to be held within the participating fund statutory surplus. The impending
change in the statutory reserving and solvency requirements is not yet fi nalized as at the date of this report, but is likely to increase the
cost of capital.
The reader should also understand that an Appraisal Value is a subjective assessment and is cautioned that the fi gures in this statement
should not be used as the sole basis for determining MAA’s fi nal value to an investor.
Yours faithfully
Zainal Abidin Mohd Kassim, FIA
Principal and Actuary
Mercer Zainal Consulting Sdn Bhd
44

Statement On Corporate Governance
This statement is made pursuant to Paragraph 15.26 of the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”)
where the Board of Directors of the Company (“Board”) is required to make a statement in relation to its compliance with the Malaysian
Code on Corporate Governance (“the Code”). The statement below sets out how the Company has applied the Principles and the extent
of its compliance with the Best Practices under the Code throughout the fi nancial year ended 31 December 2006.
1. BOARD OF DIRECTORS
1.1 Composition and Size of Board
The Board is composed as at the date of this Annual Report of 12 Directors, 5 of whom are Independent Non Executive Directors within
the meaning of Chapter 1.01 of the Listing Requirements of Bursa Securities. At least 1/3 of the Board members are Independent
Directors, who are free from any business or other relationship that could materially interfere with the exercise of their objective and
independent judgment.
1.2 Board Balance
The Board is a balanced Board with a complementary blend of expertise with professionals drawn from varied backgrounds; such
as banking and fi nance, legal, accounting and the armed forces, bringing with them, in depth and diversity in experience, expertise
and perspectives to the Group’s business operations. A brief profi le of each of the Directors is presented separately in the Annual
Report.
The Independent Non Executive Directors provide an unbias and independent view, advice and judgment to take into account the
interest, not only the Group but also of shareholders, employees and communities in which the Group conducts business.
During the third quarter of 2006, Tunku Dato’ Ya’acob bin Tunku Tan Sri Abdullah stepped down as the Group Managing Director/
Chief Executive Offi cer (“Group MD/CEO”) to assume the role as Deputy Chairman and Muhamad Umar Swift assumed the role as
Group MD/CEO.
The roles of the Chairman and Group MD/CEO are distinct and separate and each as a clearly accepted division of responsibilities
to ensure a balance of power and authority. The Chairman, Tunku Tan Sri Abdullah Ibni Almarhum Tuanku Abdul Rahman, is a Non
Executive Director, while the Group MD/CEO, Muhamad Umar Swift, is an Executive Director.
The Chairman assumes responsibility for the management of the Board and ensures that regular Board meetings are held and
ad hoc Board meetings are convened when necessary. The Board agenda is set by the Group MD/CEO and approved by the
Chairman. The Chairman ensures that Board members are provided with complete, adequate and timely information.
The Group MD/CEO is the most senior executive in the Group and assumes executive responsibilities for the Group’s business and is
responsible to ensure the execution of strategic goals, effective operation within the Group, explain, clarify and inform the Board on
matters pertaining to the Group.
1.3 Principal Duties and Resposibilities of the Board
In discharging its stewardship responsibilities, the Board has formally adopted a schedule of matters specifi cally reserved for its
decision. The schedule of matters specifi cally reserved for the Board’s decision is as follows:-
• Reviewing and adopting a strategic plan for the Company;
• Overseeing the conduct of the Company’s business to evaluate whether the business is being properly managed;
• Identifying principal risks and ensure the implementation of appropriate systems to manage these risks;
• Succession planning, including appointing, training, fi xing the compensation of and where appropriate, replacing senior
management;
• Developing and implementing an investor relations programme or shareholders communication policy for the Company; and
• Reviewing the adequacy and the integrity of the Company’s internal control systems and management information systems,
including systems for compliance with applicable laws, regulations, rules, directives and guidelines.
1.4 Board Meeting and Attendance of Directors to Board Meeting
Regular scheduled Board meetings and also ad hoc Board meetings are held as and when required to receive, deliberate and
decide on matters reserved for its decision. The Board met 7 times during the fi nancial year ended 31 December 2006.
45

Statement On Corporate Governance (continued)
The details of the attendance by each of the Directors are as follows:
Members of the Board No. of Attendance %
Tunku Tan Sri Abdullah Ibni Almarhum Tuanku Abdul Rahman 7/7 100
Tunku Dato’ Ya’acob bin Tunku Tan Sri Abdullah 5/7 71
Tunku Dato’ Seri Iskandar bin Tunku Tan Sri Abdullah 5/7 71
Major General Lai Chung Wah (Rtd) 7/7 100
Dato’ Iskandar Michael bin Abdullah 7/7 100
Yeo Took Keat 7/7 100
General Dato’ Sri Hj. Suleiman bin Mahmud (Rtd) 7/7 100
Tan Sri Dato’ Abu Zarim bin Haji Omar (Resigned on 1 July 2006) 3/3 100
Datuk Razman Md Hashim (Appointed on 1 July 2006) 4/4 100
Muhamad Umar Swift (Appointed on 7 September 2006) 3/3 100
Datuk Ramlan bin Abdul Rashid (Appointed on 7 September 2006) 3/3 100
Tan Sri Ahmad bin Mohd Don (Appointed on 13 October 2006) 1/1 100
1.5 Supply of Information
The Directors are provided with the relevant agenda and Board papers in suffi cient time prior to Board meeting for their perusal
and consideration and to enable them to obtain further explanation and clarifi cation on matters to be deliberated, to facilitate
informed decision making.
The Board has unrestricted access to timely and accurate information, which is not only confi ned to qualitative and quantitative
information, but also to other information deemed suitable such as customer satisfaction, products and services quality, market
share and market reaction and macro economic performance.
All Directors have access to the advice and services of the Company Secretary and the Senior Management staff in the Group and
may obtain independent professional advice at the Company’s expense in furtherence of their duties.
The Directors are regularly updated by the Compliance Section on new statutory as well as regulatory requirements relating to the
duties and responsibilities of Directors and the operation of the Group.
1.6 Appointments to the Board
The Nomination Committee comprising entirely of independent non-executive Directors is responsible for identifying and
recommending to the Board suitable nominees for appointment to the Board and Board Committees.
In selecting a suitable candidate, the Nomination Committee takes into account of the size of the Board with a view of determining the
impact of the number upon its effectiveness, the available vacancy due to retirement or death of a Director and the required mix of
skill, expertise and experience required for an effective Board. The fi nal decision on the appointment of a candidate recommended
by the Nomination Committee rests with the whole Board. In making its decision, the Board is guided by a comprehensive Procedure
for the Appointment and Removal of Directors, which it previously adopted.
The Board has also implemented the mechanism for the formal assessment on the effectiveness of the Board as a whole and the
contribution of each Director to the effectiveness of the Board.
1.7 Re-election
The Articles of Association of the Company provides that at least one third of the Directors will retire by rotation at each Annual
General Meeting and that all Directors shall retire once in every 3 years. A retiring Director is eligible for re-election at the Annual
General Meeting.
Directors who are 70 years of age or above are requried to submit themselves for re-appointment annually in accordance with
Section 129(6) of the Companies Act, 1965.
The Board ensures that full information is disclosed through the notice of meeting regarding Directors who are retiring and who are
willing to serve if re-elected.
1.8 Directors’ Training
All new Directors are required to undergo an orientation programme to provide them with the necessary information to enable
them to contribute effectively from the outset of their appointment. The orientation programme prescribes internal briefi ngs on the
Group’s operations and fi nancial performance. All Directors have attended the Mandatory Accreditation Programme prescribed
by the Bursa Securities.
During the fi nancial year review, the Directors have attended and participated in various programmes and forums which they have
individually or collectively considered as relevant and useful in contributing to the effective discharge of their duties as Directors.
46

Statement On Corporate Governance (continued)
The Nomination Committee constantly evaluate the training needs of the Directors and recommend trainings to each Director
to enable the Director to discharge his duties effectively and profi ciently, taking into account the individual needs of each of the
Directors.
The programmes or forums attended by them include, inter alia, the following:-
• Understanding Takaful
• Macro Economic: Malaysian Scenario 2006
• Corporate Fraud
• Innovation and Branding
• Macro Economics – Local & Global
• National Accountants Conference
• Taking Charge: Leaders in Action
• National Sales Congress
• Islamic Funds Asia 2007
2. DIRECTORS’ REMUNERATION
2.1 Determination of Directors’ Remuneration and Fees
The remuneration of Directors should commensurate with the level of professional experience, responsibilities and contribution to
growth and profi tability of the Company.
The remuneration of Directors is decided by the Board on the recommendation of the Remuneration Committee. The Board has
adopted a Procedure for Determining the Remuneration of Directors, Chief Executive Offi cer and Key Senior Offi cers which sets out
the criteria for determining the remuneration of Directors, Chief Executive Offi cer and Key Senior Offi cers of the Company.
The remuneration of the Executive Directors, namely the Group ED/CEO, Muhamad Umar Swift and the Executive Director/Group
Chief Operating Offi cer, Yeo Took Keat (“ED/Group COO”) are wholly based on their respective performance evaluation. The
performance of the Group ED/CEO is evaluated by the Board whereas the performance of the ED/Group COO is evaluated by the
Group ED/CEO.
Non Executive Directors do not receive remuneration but are paid yearly directors’ fees which are approved by the Shareholders at
the Annual General Meeting and meeting attendance allowance for each Board and Board Committee meeting. Non Executive
Directors are evaluated based on their responsibilities and experience and the size of the particular companies they participate in.
2.2 Disclosure
The remuneration of the Directors of the Company for the fi nancial year ended 31 December 2006 are set out below:
Executive Directors
(RM)
Non-Executive Directors
(RM)
Fees - 277,839
Salaries and allowances 2,493,712 58,000
Bonus 1,006,017 -
Other Benefi ts 95,391 35,200
Total 3,595,120 371,039
The number of Directors whose total remuneration falls within the following bands is as follows:
Range of Remuneration Executive Directors Non-Executive Directors
Below RM50,000 - 6
RM50,001 to RM100,000 - 1
RM100,001 to RM150,000 - 1
RM500,001 to RM650,000 1 -
RM750,001 to RM800,000 - -
RM1,050,001 to RM1,100,000 1 -
RM1,450,001 to RM1,500,000 - -
RM1,500,001 to RM2,000,000 1 -
47

Statement On Corporate Governance (continued)
3. BOARD COMMITTEES
The Board has establish Board Committees to assist the Board in performing its duties and discharging its responsibilities more effi ciently
and effectively. The Board Committees operate on Terms of Reference approved by the Board and make regular reports to the Board
on their activities. The details of the Board Committees are as follows:-
3.1 Audit Committee
The Board has established an Audit Committee principally to review the Company’s and the Group’s fi nancial reporting and ensure
the effectiveness of the systems of internal control and compliance.
The Audit Committee consists of 4 Directors, 3 of whom are Independent Non Executive Directors. The Audit Committee functions
on a Terms of Reference approved by the Board. Full details on the membership, the Terms of Reference and the activities of the
Audit Committee for the fi nancial year ended 31 December 2006 are disclosed separately in this Annual Report under Statement
of Internal Control.
3.2 Nomination Committee
In compliance with the Listing Requirements of Bursa Securities, a Nomination Committee was established on 30 August 2001. The
Committee comprises 3 Non Executive Directors, 2 of whom are independent. The members of the Nomination Committee as at
the date of this Annual Report are:-
Chairman: Dato’ Iskandar Michael bin Abdullah - Independent Non Executive Director
Members : Tunku Dato’ Seri Iskandar bin Tunku Tan Sri Abdullah - Non Executive Director
Major General Lai Chung Wah (Rtd) - Independent Non Executive Director
The Nomination Committee functions on a Terms of Reference approved by the Board. The principal duties and functions of the
Nomination Committee are as follows:-
(a) establishing the scope of work for the Board, Chief Executive Offi cer and Board Committees;
(b) recommending and assessing new nominees for Board and Board Committees;
(c) overseeing the overall composition of the Board in terms of appropriate size, mix of skill, and the balance between executive
directors, non-executive directors and independent non-executive directors;
(d) establishing a mechanism for the formal assessment and assessing the effectiveness of the Board as a whole, individual Directors,
Board Committees and the Chief Executive Offi cer;
(e) recommending to the Board on the removal of a director and/or chief executive offi cer if he is ineffective, errant or negligent in
discharging his responsibilities;
(f) ensuring that all directors undergo appropriate induction programmes and receive adequate and appropriate continuous
training; and
(g) overseeing appointment, management of succession planning and performance evaluation of key senior offi cers and
recommending to the Board the removal of key senior offi cers if they are ineffective, errant and negligent in discharging their
responsibilities.
The Nomination Committee meets at least once a year, with additional meetings convened as necessary. The Nomination Committee
met 3 times during the fi nancial year ended 31 December 2006.
3.3 Remuneration Committee
In compliance with the Listing Requirements of Bursa Securities, a Remuneration Committee was established on 30 August 2001. The
Committee comprises 4 Non Executive Directors, 3 of whom are independent. The members of the Remuneration Committee as at
the date of this Annual Report are:-
48

Statement On Corporate Governance (continued)
Chairman: General Dato’ Sri Hj. Suleiman bin Mahmud (Rtd) – Independent Non Executive Director
Members : Major General Lai Chung Wah (Rtd) – Independent Non Executive Director
Dato’ Iskandar Michael bin Abdullah - Independent Non Executive Director
Tunku Dato’ Seri Iskandar bin Tunku Tan Sri Abdullah – Non Executive Director
The Remuneration Committee functions on a Terms of Reference approved by the Board. The primary duties and functions of the
Remuneration Committee are as follows:-
(a) recommending a policy and framework for determining the remuneration of Directors, Chief Executive Director and Key Senior
Offi cers; and
(b) recommending specifi c remuneration packages for Directors, Chief Executive Offi cer and Key Senior Offi cers.
The Remuneration Committee meets at least once a year, with additional meetings convened as necessary. The Remuneration
Committee met 2 times during the fi nancial year ended 31 December 2006.
3.4 Risk Management Committee
Under Best Practices AAI of the Code, the Board is expected to identify the principal risks affecting the Company and the Group
and ensure the implementation of appropriate systems to manage these risks. A Risk Management Committee has been established
on 29 May 2003 to evaluate the principal risks affecting the Company and the Group, assess the suffi ciency of controls to minimise
those risks and if necessary recommend a particular risk to be terminated.
The Risk Management Committee comprises 3 Directors, 2 of whom are independent. The members of the Risk Managament
Committee as at the date of this Annual Report are:-
Chairman: General Dato’ Sri Hj. Suleiman bin Mahmud (Rtd) – Independent Non-Executive Director
Members: Dato’ Iskandar Michael bin Abdullah – Independent Non Executive Director
Yeo Took Keat – Executive Director
The Risk Management Committee functions on a Terms of Reference approved by the Board. The principal duties and functions of
the Risk Management Committee are, inter alia, as follows:-
(a) setting up a risk management structure;
(b) reviewing and recommending risk management strategies, policies and framework for identifying, measuring, monitoring and
controlling risks;
(c) ensuring adequate infrastucture, resources and systems are in place for effective risk management; and
(d) reviewing of management’s periodic reports on risk exposure, risk portfolio composition and risk management activities.
The Risk Management Committee met 4 times during the fi nancial year ended 31 December 2006.
4. SHAREHOLDERS
4.1 Dialogue between Companies and Investors
The Company values dialogue with shareholders as a means of effective communication that enables the Board to convey
information about the Group’s performance, corporate strategy and other matters affecting shareholders’ interests.
The Company holds Investors Briefi ng every half yearly to update institutional shareholders on the development of the Group and
invite questions from the fl oor. The ED/Group COO who is responsible for investors’ relations also holds regular meetings with fund
managers and analysts on a personal basis.
Institutional investors can also access the Company’s website at www.maa.com.my for the latest corporate information of the
Group.
49

Statement On Corporate Governance (continued)
4.2 Annual General Meeting
The Annual General Meeting is the principal forum for dialogue with individual shareholders. At the Annual General Meeting, which
is generally well attended, shareholders have direct access to the Board and are given the opportunity to ask questions during the
open question and answer session prior to moving for adoption of the Company’s Audited Financial Statements and Directors’
Report for the fi nancial year and other businesses (if applicable). The shareholders are encouraged to ask questions both about the
resolutions being proposed and about the Group’s operations in general.
Extraordinary General Meetings are held as and when shareholders’ approvals are required on specifi c matters and shareholders
are notifi ed of such meetings in accordance with the Listing Requirements of Bursa Securities.
The Board is also committed to ensure that the shareholders and other investors are well informed of major developments of the
Group and the information is also communicated to them through the following channels:
(a) the Annual Report;
(b) various disclosures and announcements made to Bursa Securities, including the quarterly results and annual results; and
(c) the Company’s website at www.maa.com.my through which shareholders and the public in general can gain access to the
latest corporate information of the Group.
Further, the Board has appointed Major General Lai Chung Wah (Rtd) as the Senior Independent Director to whom all concerns may
be conveyed.
5. ACCOUNTABILITY AND AUDIT
5.1 Financial Reporting
The Board is responsible to ensure that the Company’s and the Group’s fi nancial statements are in accordance with the applicable
approved accounting standards in Malaysia and the provisions of the Companies Act, 1965.
The Group publishes full fi nancial statements annually, half yearly and quarterly as required by the Listing Requirements of Bursa
Securities.
Before fi nancial statements are released to Bursa Securities, the fi nancial statements are reviewed by the Audit Committee and
approved by the Board. The details of the Company’s and the Group’s fi nancial positions are included in the Financial Statements
section of the Annual Report.
5.2 Internal Control
System of Internal Control
The Board maintains a sound system of internal control to safeguard shareholders’ investment and the Group’s assets. The system
of internal control covers not only fi nancial controls but also controls relating to operations, compliance and risk management. The
system of internal control involves each key business unit and its management, including the Board, and is designed to meet the
business units’ particular needs, and to manage the risks to which they are exposed. The system of internal control, by its nature, can
only provide reasonable and not absolute assurance against material errors, frauds or losses occuring.
A sound system of internal controls can only operate within a defi ned organisational and policy framework. The management
framework of the Company clearly defi ned the roles, responsibilities and reporting lines of each business units and support units.
Delegations of authority, control processes and operational procedures are documented and disseminated to staff. While all
employees have a part to play in upholding the system of internal control, the Company has established certain sections to provide
independent oversight and control. These sections include the Internal Audit Department, Legal Affairs Section, Compliance Section,
Risk Management Section and Fraud Control Section.
Internal Audit
The internal audit function is performed by the Internal Audit Department which is independent of the activities it audit and is
performed with impartiality, profi ciency and due professional care. Its role is to provide independent and objective reports on
the organisation’s management, records, accounting policies and controls to the Audit Committee. The internal audits include
evaluation of the processes by which signifi cant risks are identifi ed, assessed and managed. Such audits also ensure instituted
controls are appropriate and are effectively applied to achieve acceptable risk exposures in line with the Group’s risk management
framework.
50

Statement On Corporate Governance (continued)
Legal
The Legal Affairs Section seeks to manage the legal risks of the Company and the Group by ensuring that all legal documentations
are properly executed and that the interest of the Company and the Group are protected at all times. It further monitors the quality
of legal services provided by external solicitors and acts as a liaison between the Management and the external solicitors.
Compliance
The compliance function has specifi c accountability for instilling and maintaining a strong compliance culture and framework
within the Group. The compliance function is undertaken by an independent Compliance Section which ensures the Company’s
compliance with the Listing Requirements of Bursa Securities and other regulatory requirements.
Risk Management
The Risk Management Section assist the Risk Management Committee in instituting an enterprise risk management framework and
infrastructure for the Company and the Group. It further acts as a liaison between the Business Units and the Risk Management
Committee in the reporting of key risks of the Company and the Group.
Fraud Control
In an effort to minimise the risk of fraud, the Board has adopted an Anti-Fraud Framework for the Company and the Group. The Anti-
Fraud Framework consists of strategies for prevention and detection of fraud. A Fraud Control Section has been set up at the end of
2005 to assist the Audit Committee in the implementation of the Anti-Fraud Framework.
During the year 2006, the Fraud Control Section has conducted a series of anti-fraud awareness training and enhanced the policies
and procedures of the Company to incorporate the Anti-Fraud Framework.
The effectiveness of the system of internal controls of the Company and the Group is reviewed periodically by the Audit Committee.
The Statement on Internal Control, which provides an overview of the state of internal control within the Group is set out separately
in this Annual Report.
5.3 Relationship with External Auditors
The independent External Auditors fi ll an essential role for the shareholders by enhancing the realiability of the Group’s fi nancial
statements and giving assurance of that realiability to users of these fi anancial statements. The External Auditors have an obligation
to bring any signifi cant defects in the Group’s system of control and compliance to the attention of Management, the Audit
Committee and the Board.
It is a policy of the Audit Committee to meet with the External Auditors at least twice a year to discuss their audit plan, audit fi ndings
and the fi nancial statements.The Audit Committee also meets with the External Auditors whenever it deems necessary.
6. COMPLIANCE WITH THE CODE
The Company is in substantial compliance with the Principles and Best Practices of the Code throughout the fi nancial year ended 31
December 2006.
51

Risk Management
The Board recognises that risk management is an integral part of the Group’s business operations and that the identifi cation and management
of risks will enhance the achievement of the Group’s business objectives. The Group has implemented an on-going process of identifying,
evaluating, monitoring and managing of risks that may affect the achievement of its business objectives. The on-going application of an
integrated enterprise wide risk management framework is aimed at enhancing the internal control by ensuring that risks related to the
Company and the Group are managed through a systematic and consistent risk management process.
Accountability and Responsibilities
The Company believes that clear accountability and responsibilities are crucial for the risk management process. The risk management
framework of the Group is based on the following principles:-
1. The Board is ultimately responsible for the management of risks. The Board through the Risk Management Committee maintains overall
responsibilities for the risk oversight within the Group.
2. The Risk Management Committee is responsible for the risk oversight for the key risk affecting the Group. The Risk Management Committee
assesses the adequacy of the existing controls to minimise the key risk areas and review the appropriate risk treatment on those risks.
3. The Risk Management Section of the Company is responsible for managing the risk management system and ensures timely review of
the risks affecting each Business Units within the Group. It is also responsible for assisting Business Units in the identifi cation, evaluation and
monitoring of risks.
4. The Business Units are primarily responsible for identifying, evaluating and managing risks within their Units. They are required to put in
place appropriate risk reduction action plans on areas where risks are rated as high and signifi cant in order to ensure that their day-today
business activities are carried out within acceptable risk level.
5. The Audit Committee’s key role, supported by the Internal Audit Department, is to provide an independent assessment of the adequacy
and reliability of the risk management processes, and compliance with risk policies and regulatory guidelines.
Risk Management Process
The Company has established within its risk management framework a structured approach to enterprise wide risk management. The risk
management process encompasses the following 4 stages:-
1. Risk Identification
During the risk identifi cation stage, the Risk Management Section working together with the Business Units set out to identify the Business
Units’ exposure to current and potential risks that could have an effect on achieving the Company’s objectives.
The Risk Management Committee has classifi ed risks into 9 key risk factors (“KRF”), namely, Product Risk, Human Risk, Regulatory Risk,
Operational Risk, Financial Risk, External Risk, Customer Risk, Integrity Risk and Supplier Risk.
During the year 2006, the Company has expanded Financial Risk to include Credit Risk, Market Risk and Liquidity Risk.
2. Risk Evaluation
In this stage, risks identifi ed are evaluated on their probability of occurrence and their impact severity. It is at this stage that the risk profi le
for each risk is established. The risk profi les are rated either as High Risk, Signifi cant Risk, Moderate Risk or Low Risk.
During the year 2006, the Risk Management Committee has enhanced the defi nition for the rating of risks to provide a more accurate
risk rating process.
3. Risk Treatment
This is the stage where each risk is treated according to the risk appetite of the Company. Risks can be Accepted, Minimised, Transferred
or Terminated.
4. Risk Monitoring
Risks are monitored through a Risk Management Action Plan. The progress on the implementation of risk policies are reported to the
Risk Management Committee from time to time. The Internal Audit Department of the Company play a crucial role in monitoring
compliance with the risk management policies and action plans.
The Board acknowledges that Risk Management is dynamic and is constantly reviewing the key risks affecting the Company and the
Group to adapt to changes in the social, economic and fi nancial environment in which the Company and the Group conduct their
businesses.
52

Other Bursa Securities Compliance Information
1. Utilisation of Proceeds Raised from Corporate Proposal
a) In 2004, the Company proposed a Renounceable Rights Issue of up to 152,176,876 new Irredeemable Preference Shares of RM1
each (“IPS”) (“Rights IPS”) together with up to 152,176,876 free Detachable Ordinary Shares of RM1 each (“Ordinary Shares”) (“Bonus
Shares”) and up to 152,176,876 free Detachable Warrants (“Warrants”) at an indicative issue price of RM2 per rights IPS, on the
basis of one (1) Rights IPS with one (1) free detachable Bonus Share and one (1) free detachable Warrant for every one (1) existing
ordinary share held in the Company at an entitlement date to be determined (“Rights Issue of IPS”). The Rights Issue of IPS was
approved by the shareholders of the Company at the Extraordinary General Meeting held on 22 February 2005.
Given to the uncertain sentiments in the Malaysian equity market prevailing then, the Company with the approval of the Securities
Commission (“SC”) had extended the completion of the proposed Rights Issue of IPS twice, fi rstly from 3 June 2005 to 31 December
2005 and subsequently from 1 January 2006 to 30 June 2006.
On 3 May 2006, the Company announced that after taking into consideration the then market sentiments and the market
performance of the ordinary shares of the Company, it has decided to abort the proposed Rights Issue of IPS.
Notwithstanding the abortion of the proposed Rights Issue of IPS, the Board of Directors of the Company on 3 May 2006 announced
that the Company will proceed with the Proposed Bonus Issue of up to 152,176,876 new ordinary shares of RM1 each as fully paid on
the basis of one (1) Bonus Share for every one (1) existing ordinary share held to the registered shareholders of the Company at the
close of business on an entitlement date to be determined and announced later (“Proposed Bonus Issue”).
The Proposed Bonus Issue will be issued via capitalization of up to RM152,176,876 from the following:
(i) up to RM11,744,389 from share premium account of the Company; and
(ii) up to RM140,432,487 from retained earnings of the Company.
The Proposed Bonus Issue was approved by the shareholders of the Company at the Annual General Meeting held on 21 June
2006.
The Company had on 19 July 2006 submitted an Application for listing of additional ordinary shares to be issued pursuant to the
Proposed Bonus Issue to Bursa Malaysia Securities Berhad (“Bursa Securities”). The approval was obtained on 1 August 2006 from
Bursa Securities.
152,176,876 new ordinary shares of RM1 each were subsequently allotted on 8 September 2006 pursuant to the Proposed Bonus
Issue.
(b) On 4 August 2006, the Company announced the Proposed Issuance of Commercial Papers (“CP”) and/or Medium Term Notes
(“MTN”) Programme of up to RM200 million (“Proposed Programme”).
The Proposed Programme will comprise the issuance of CP with tenors ranging from one (1) month to twelve (12) months and/or MTN
with tenors of more than one (1) year but not exceeding seven (7) years. The proceeds from the Proposed Programme will be used in
relation to fi nancing the Company’s investment in Takaful business, to repay certain existing bank borrowings of the Company and
its subsidiaries, to fi nance redemption of its existing RM120 million Serial Fixed Rate Bonds maturing on 21 August 2007, to pre-fund
the debt service reserve account to be established for the purposes of the Proposed Programme and to fi nance working capital of
the Company.
The approval for the Proposed Programme was obtained on 28 August 2006 from the SC.
On 5 December 2006, the Company submitted an application to the SC for the following variations to the principal terms and
conditions of the Proposed Programme:
i) to secure the issuance under the Proposed Programme by a bank guarantee facility from DBS Bank Ltd, Labuan Branch (“DBS
Bank”) up to the maximum aggregate principal amount of the United States Dollars equivalent to RM200 million; and
ii)
to vary the utilization of proceeds of the Proposed Programme, where among others the Company’s investment in Takaful
business will be fi nanced from internally generated fund
The SC has via its letter dated 22 December 2006 approved the above stated variations.
On 8 January 2007, the Company successfully issued RM200 million nominal amount of Medium Terms Notes up to a tenure of 5
years.
2. Share Buy-Back
The Company has not purchased any of its own shares during the fi nancial year ended 31 December 2006 and the preceding fi nancial
year.
3. Options, Warrants or Convertible Securities
During the fi nancial year ended 31 December 2006, there were no options, warrants or convertible securities exercised or converted by
the Company.
53

Other Bursa Securities Compliance Information (continued)
4. American Depository Receipt (ADR) or Global Depository Receipt (GDR)
The Company has not sponsored any ADR or GDR programme for the fi nancial year ended 31 December 2006.
5. Sanctions and/or Penalties
Save as disclosed below, there were no sanctions and/or penalties imposed on the Company, its subsidiaries, directors or management
by the relevant regulatory bodies during the fi nancial year ended 31 December 2006:-
(a) On 26 April 2006, Malaysian Alliance Assurance Berhad (“MAA”), a wholly owned subsidiary of the Company, was compounded by
Bank Negara Malaysia (“BNM”) for a sum of Ringgit Malaysia Fifty Thousand (RM50,000) for breach of Section 141(1) of the Insurance
Act 1996 read together with Paragraph 65(1)(a) of the Insurance Regulations 1996, for failing to collect motor insurance premiums
prior to issuance of cover notes to its direct customers. MAA accepted the compound and made payment to BNM within the
stipulated time frame.
(b) On 31 July 2006, MAA Credit Sdn Bhd (“MAAC”), a wholly owned subsidiary of MAA Corporation Sdn Bhd (“MAA Corp”), which is
in turn a wholly owned subsidiary of the Company, paid the sum of RM22,475 and RM54,500 as penalties for under estimation of
advance tax for year 2005 and late payment of tax for year 2005 respectively.
(c) On 15 August 2006, MAAC paid a sum of RM150 as penalty for the late fi ling of fi nancial statement for year 2005.
(d) On 15 November 2006, High Sphere Sdn Bhd (“HSSB”), a wholly owned subsidiary of MAA Corp, was compounded by Companies
Commission of Malaysia (“CCM”) for a sum of RM150 for breach of Section 169(1) of the Companies Act 1965, for failing to present
its profi t and loss account at its annual general meeting. HSSB accepted the compound and made payment to CCM on 5 March
2007.
6. Non-Audit Fees
There was no non-audit fee paid to external auditors for the fi nancial year ended 31 December 2006.
7. Variation in Results
The Company did not make or announce any profi t forecast or projection during the fi nancial year ended 31 December 2006. There
was also no variation to the unaudited results which were announced for the fi nancial year ended 31 December 2006.
8. Profit Guarantees
During the fi nancial year ended 31 December 2006, there were no profi t guarantees given by the Company.
9. Material Contracts
There was no material contracts (not being entered into in the ordinary course of business) entered into by the Group which involved
directors and shareholders, either still subsisting at the end of the fi nancial year ended 31 December 2006 or entered into since the end
of the previous fi nancial year.
10. Revaluation Policy
In the fi nancial year ended 31 December 2006, the Company does not own any landed properties. The subsidiary companies that own
landed properties revalued the properties in accordance with the requirements of the applicable approved accounting standards in
Malaysia and relevant regulatory authorities.
54

Other Bursa Securities Compliance Information (continued)
Recurrent Related Party Transactions of a Revenue or Trading Nature
On 21 June 2006, the Company sought approval for a shareholders’ mandate for MAAH Group to enter into Recurrent Transactions (as
defi ned in the Circular to Shareholders dated 30 May 2006) in their ordinary course of business with related parties (“Shareholders’ Mandate”)
as defi ned in Chapter 10 of the Listing Requirements of Bursa Securities.
The aggregate value of transactions conducted during the fi nancial year ended 31 December 2006 are :-
Transacting
Party
Nature of
Transaction Related Party Nature of Interest
Value of
Transaction
(1/1/2006-
31/12/2006)
RM’000
Malaysian
Assurance
Alliance
Berhad (MAA)
Offi ce rental
income received
and receivable
Trace Management
Services Sdn Bhd (Trace)
A company in which TA, TI and TY* have deemed
interest by virtue of their substantial interest in The
Melewar Corporation Berhad, the substantial
shareholder of Trace
87
Melewar Group Berhad
(MGB)
A company in which TA, TI and TY are directors
and major shareholders
72
Green Silk Sdn Bhd
A company in which TA is a director and major
shareholder
128
Melewar Equities Sdn Bhd
(MESB)
A major shareholder of the Company 35
Melewar Apex Sdn Bhd
A company controlled by Tunku Soraya binti
Tunku Abdullah, who is the daughter of TA and
sister of TI and TY
45
Mitra Malaysia Sdn Bhd
(Mitra)
A company in which TI is a director and has
deemed interest by virtue of his subtantial
interest in Melewar Leisure Sdn Bhd, the holding
company of Mitra
20
MAAKL Mutual Bhd (MAAKL
Mutual)
A 70% subsidiary of the Company and 20%
owned by Khyra Liberty Sdn Bhd, a company
controlled by TY
478
Pacifi c World Travel Sdn
Bhd (PWT)
A company in which TI is a director and has
deemed interest by virtue of his subtantial
interest in Melewar Leisure Sdn Bhd, the holding
company of PWT
17
MAA Bancwell Trustee
Berhad (MAA Bancwell)
An associated company and a company in
which TA, TI and TY have deemed interest by
virtue of their substantial shareholdings in MGB, a
shareholder of MAA Bancwell
40
MAA
Offi ce rental
expenses paid
and payable
Central Market
Development Sdn Bhd
(CMD)
A company in which TI has deemed interest by
virtue of his subtantial interest in Melewar Leisure
Sdn Bhd, the holding company of CMD
61
MAAH Group
Purchase of air
tickets and travel
package paid
and payable
Mitra
A company in which TI is a director and has
deemed interest by virtue of his subtantial
interest in Melewar Leisure Sdn Bhd, the holding
company of Mitra
3,374
MAAH Group
Corporate
secretarial and
related services
fees paid and
payable
Trace
A company in which TA, TI and TY have deemed
interest by virtue of their substantial interest in The
Melewar Corporation Berhad, the substantial
shareholder of Trace
242
MAA
Collection agent
fees received and
receivable
MAAKL Mutual A 70% subsidiary of the Company and 20%
owned by Khyra Liberty Sdn Bhd, a company
controlled by TY
7
MAAGNET
Provision of
Information
Technology
Services
MAAKL Mutual A 70% subsidiary of the Company and 20%
owned by Khyra Liberty Sdn Bhd, a company
controlled by TY
424
55

Other Bursa Securities Compliance Information (continued)
Transacting
Party
Nature of
Transaction Related Party Nature of Interest
Value of
Transaction
(1/1/2006-
31/12/2006)
RM’000
MAAGNET
GIMS system
support and
maintenance fee
MAA General Assurance
Philippines, Inc.
An associated company and a company in
which TY is deemed interested via his substantial
interest in MAAH
51
MAAH Management fee MAAKL Mutual A 70% subsidiary of the Company and 20% owned
by Khyra Liberty Sdn Bhd, a company controlled
by TY
Wira Security
Services Sdn
Bhd
Provision of security
services
MAA Bancwell
Mycron Steel Berhad
(Mycron)
An associated company and a company in
which TA, TI and TY have deemed interest by
virtue of their substantial shareholdings in MGB, a
shareholder of MAA Bancwell
A company in which TI and TY are directors of
Mycron. TY is deemed interest in Mycron by virtue
of his substantial shareholding in MIG, the holding
company of Mycron. TI is deemed interested in
Mycron by virtue of his family relationship with TY
48
350
124
Melewar Industrial Group
Berhad (MIG)
A company in which TA, TI and TY are directors of
MIG. TY is deemed interested in MIG by virtue of
his substantial interest in MESB, who in turn is the
major shareholder of MIG
135
MAA
Corporate
Advisory Sdn
Bhd
Provision of
corporate advisory
services
MIG
A company in which TA, TI and TY are directors of
MIG. TY is deemed interested in MIG by virtue of
his substantial interest in MESB, who in turn is the
major shareholder of MIG
18
MAAH Group
Trustee fees paid
and payable
MAA Bancwell
An associated company and a company in
which TA, TI and TY have deemed interest by
virtue of their substantial shareholdings in MGB, a
substantial shareholder of MAA Bancwell
164
Notes :-
* TA is Tunku Tan Sri Abdullah Ibni Almarhum Tuanku Abdul Rahman
TI is Tunku Dato’ Seri Iskandar bin Tunku Tan Sri Abdullah
TY is Tunku Dato’ Ya’acob bin Tunku Tan Sri Abdullah
** MIG is Melewar Industrial Group Berhad
56

Statement Of Internal Control
The Malaysian Code on Corporate Governance requires the board of listed companies to maintain a sound system of internal control to
safeguard shareholder’s investments and the Group’s assets. Paragraph 15.27(b) of the Bursa Malaysia Listing Requirements requires Board
of Directors of listed companies to include a statement in their annual reports on the state of their internal controls.
A. THE BOARD’S AND MANAGEMENT’S RESPONSIBILITY
The Board of Directors (“Board”) has overall responsibility for reviewing and adopting a strategic direction for the Group, overseeing and
evaluating whether the Group’s business is being properly managed, identifying principal risks and implementing appropriate system to
manage risks, developing and implementing a investors relations programme for the Group and reviewing the adequacy and integrity
of the Group’s internal control systems and management information systems, including systems for compliance with applicable laws,
regulations, rules, directives and guidelines.
The Board recognizes the importance of sound internal controls and risk management practices to good corporate governance. The
system of internal control is designed to manage, rather than eliminate, the risk of failure to achieve corporate objectives. However, the
system can only provide reasonable but not absolute assurance against material misstatement or loss.
B. INTERNAL CONTROL PROCESSES
A system of internal controls provides a mechanism to facilitate assessment of effective and effi cient operation and to ensure compliance
with laws, regulations, internal procedure and guidelines. This system is also designed to safeguard the assets of the Group, ensure the
maintenance of proper accounting records and provide reliable fi nancial information for use within the business of the Group and for
publication.
The Board has established an organizational structure with clearly defi ned lines of accountability and delegated authority. The
Chief Executive Offi cer (“CEO”) and senior management team are assigned with the responsibility of managing the Group. They
are accountable for the conduct and performance of their business within the agreed business strategies. Through their review of
performance and operation reports, as well as by attending management meetings, the CEO and senior management team monitor
the day-to-day affairs of the Group. Other than through the above meetings and reports, the CEO and senior management also
regularly meet with the head of departments and the management team of subsidiaries to address any matters arising. Signifi cant issues
are brought to the attention of the CEO, who in turn will direct these matters, if necessary, to the Board for its attention
Continuous actions are being taken to improve the policies, processes, people and structures as key elements of internal control. This
continuous improvement is not only to improve the management of existing risks but also to anticipate and manage potential risks
considering the changes in the risk profi le experienced by the industry and the Group.
Key elements of Group’s internal control system, including the processes in place to review its adequacy, are:
i) a clearly defi ned organizational structure that is aligned to business and operations requirement headed by accountable Chief
Executive Offi cers;
ii)
annual budget and monthly reporting of results and key performance indicators to assess and sustain the effectiveness of the
Group’s system of controls;
iii) the establishment of a Management Committee comprising the senior management with responsibilities that include execution of
the following controls:
a) monthly performance reviews of actual performance against expectations and budget; and
b) quality assurance on key information and performance reports.
iv) procedures with embedded internal control are documented in series of operating manuals. Continuous efforts are undertaken to
ensure standardisation, timeliness, comprehensiveness and improved communications on key internal control procedures including
authorisation, accountability, monitoring and reconciliation processes;
v) continuous education for employees on the importance of governance and internal control as part of their development
programme;
vi) the establishment of an independent Internal Audit Department which reports to the Audit Committee. The internal audit teams
conduct its audit function in accordance with the annual audit plan approved by the Audit Committee covering compliance,
operational and system audit of the company. The audit function includes performing systematic reviews of key processes relating
to high risk areas and assessing the effectiveness of internal control including compliance. Areas for improvement and proposed
recommendations are highlighted to senior management and the Audit Committee with a periodic follow up review on actions
taken;
vii) the Audit Committee, on behalf of the Board, regularly reviews internal control issues identifi ed in reports prepared by the internal
auditor and external auditor and the related actions taken with senior management. The scope of this review includes any signifi cant
internal control aspects of issues identifi ed in the fi nancial statements as disclosed in this annual report.
57

Statement Of Internal Control (continued)
The Board ensures that on-going reviews are continuously carried out to measure the effectiveness of the internal control system and to
establish shareholders’ confi dence. This is to ensure that the Group’s system of internal control is updated in line with the changes in the
operating environment and consistent with the Group’s overall objectives. The Board further seeks regular assurance on the continuity
and effectiveness of the internal control system through independent appraisals by internal and external auditors.
Major associated companies have been dealt with in this statement as part of the Group for the purposes of applying the internal
control processes.
The Board is of the view that current system of internal control is suffi cient to safeguard the Group’s interest.
Directors’ Responsibility Statement
In Respect Of Annual Audited Accounts
The Directors are responsible for ensuring that the annual audited fi nancial statements of the Company and the Group are drawn up in
accordance with the requirements of the applicable approved accounting standards in Malaysia, the provisions of the Companies Act,
1965, Bank Negara Malaysia Guidelines and the Listing Requirements of Bursa Securities.
The Directors are also responsible for ensuring that the annual audited fi nancial statements of the Company and the Group are prepared
with reasonable accuracy from the accounting records of the Company and the Group so as to give a true and fair view of the state of
affairs of the Company and the Group as at 31 December 2006.
In preparing the annual audited fi nancial statements, the Directors have:-
(a) applied the appropriate and relevant accounting policies on a consistent basis;
(b) made judgements and estimates that are reasonable and prudent; and
(c) prepared the annual audited fi nancial statements on a going concern basis.
58

Audit Committee Report
ESTABLISHMENT
The Audit Committee was established as a sub committee of the Board of Directors with specifi c terms of reference that have been
approved by the Board. Its principal objectives are to assist the Board in discharging its statutory duties and responsibilities relating to
accounting and reporting practices of the holding company and each of its subsidiaries. In addition, the Audit Committee shall:
• evaluate the quality of the audits performed by the internal and external auditors;
• provide assurance that the fi nancial information presented by management is relevant, reliable and timely;
• oversee compliance with relevant laws and regulations and observance of a proper code of conduct; and
• determine the quality, adequacy and effectiveness of the Group’s internal control environment.
The Audit Committee comprises the following directors, the majority of whom are independent non-executive directors:
1. Major General Lai Chung Wah (Rtd) - Independent Non-Executive
2. Dato’ Iskandar Michael bin Abdullah - Independent Non-Executive
3. Tunku Dato’ Ya’acob bin Tunku Tan Sri Abdullah - Non-Independent Non-Executive
4. General Dato’ Sri Hj. Suleiman bin Mahmud (Rtd) - Independent Non-Executive
The Chairman of the Audit Committee is Major General Lai Chung Wah (Rtd). The Directors’ profi les are set out on pages 8 to 13 in the Annual
Report.
The Audit Committee meets regularly with senior management and internal audit management, and the external auditors to review the
Company’s and the Group’s fi nancial reporting, the nature and scope of audit reviews and the effectiveness of the systems of internal
control and compliance.
SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE AND THE INTERNAL AUDIT FUNCTIONS
During the fi nancial year ended 31 December 2006, the Audit Committee comprising the following members held a total of fi ve (5) meetings.
The details of attendance of the Committee members are as follows:
No. of Meetings
Percentage of
Name of Committee Held Attended Attendance
Major General Lai Chung Wah (Rtd) 5 5 100%
Dato’ Iskandar Michael bin Abdullah 5 5 100%
Tunku Dato’ Ya’acob bin Tunku Tan Sri Abdullah 5 4 80%
General Dato’ Sri Hj Suleiman bin Mahmud (Rtd) 5 5 100%
In this fi nancial year, apart from reviewing the quarterly announcements and annual fi nancial statements, the Audit Committee also approved
the annual internal audit plan. The risk based plan is developed to cover key operational areas, fi nancial activities and information systems
that are signifi cant to the overall performance of the Company and the Group on a cyclical basis.
The Internal Audit Department also conducts audits on an ad hoc basis based on special requests either by the Board of Directors or the
Senior Management. It also works closely with the external auditors to resolve any control issues raised by them and assists in ensuring
appropriate management based actions are taken.
In this fi nancial year, the Internal Audit Department conducted 34 audit assignments covering selected locations at the Group Corporate
Headquarters and subsidiary companies stationed within the Southeast Asian Region, in particular Malaysia, Indonesia and Philippines. In
addition, a further 52 audit assignments were carried out over MAA Assurance’s Head Offi ce and branches. The Audit Committee receives
regular reports from the Head of the Internal Audit Department on the audit results.
TERMS OF REFERENCE
1.0 Membership and Composition
The terms of reference provide a framework for election of the Audit Committee members from amongst themselves, comprising no
fewer than three (3) directors, the majority of whom shall be independent non-executive directors.
The members of the Audit Committee shall elect among them an independent non-executive Director as the chairman of the Audit
Committee.
No alternate director shall be appointed as a member of the Audit Committee.
In the event of any vacancy in the Audit Committee resulting in the number of members being reduced to below three, the company
must fi ll the vacancy within three months.
2.0 Meetings
The Audit Committee meetings shall be conducted at least three (3) times annually, or more frequently as circumstances dictate. The
Senior Management’s representatives, the Internal Audit representatives, and the External Auditors’ representatives attend the meetings
when appropriate. Other Board members and employees may attend meetings upon the invitation of the Audit Committee.
59

Audit Committee Report (continued)
3.0 Quorum
A quorum shall consist of a majority of Audit Committee members who are non-executives directors
4.0 Authority
The Audit Committee shall, in accordance with a procedure to be determined by the Board of Directors and at the expense of the
Company:
(a) investigate any activity within its terms of reference. All employees shall be directed to cooperate as requested by members of the
Audit Committee;
(b) have full and unlimited/unrestricted access to all information and documents/resources which are required to perform its duties as
well as to the internal and external auditors and senior management of the Company;
(c) obtain, if it considers necessary, independent professional advice or other advice and to secure the attendance of outsiders with
relevant experience and expertise;
(d) be able to convene meetings with the auditors, external or internal, without the attendance of the Executive Director, whenever
deemed necessary; and
(e) be able to make reports when necessary to the relevant authorities if a breach of any legal or regulatory requirement has
occurred.
5.0 Duties and Responsibilities
The duties and responsibilities of the Audit Committee are as follows:
(a) to review:
i. with the external auditors on their audit plan, scope and nature of audit for the Company and the Group;
ii. with the external auditors on their evaluation of the system of internal controls of the Group and its audit fi ndings ;
iii. any problems and reservations arising from the interim and fi nal external audits, and any matters the external auditors may wish
to highlight;
iv. the quality of external auditors and make recommendations concerning their appointment, termination and remuneration and
to consider the nomination of external auditors;
v. the liaison between the external auditors, the management and the Board of Directors and also the assistance given by
management and employees to the external auditors;
vi. the adequacy of the scope, functions and resources of the Internal Audit Department and that it has the necessary authority to
carry out its work;
vii. the internal audit programme, processes, results of the audit and whether or not appropriate action has been taken as per the
recommendations of the Internal Audit Department;
viii. quarterly results and year end fi nancial statements prior to the Board of Directors’ approval pertaining to:
• major accounting policy changes.
• signifi cant and unusual events.
• compliance with accounting standards and other legal requirements and to monitor any related party transactions and
confl ict of interest situation that may arise within the Group and to report, if any, transactions between the Group and any
related party outside the Group which are not based on arms length terms and which are disadvantageous to the Group.
(b) to recommend the appointment of the external auditors, and to discuss their audit fees and any questions of resignation or
dismissal;
(c) to monitor organizational compliance with Bursa Malaysia Securities Berhad’s requirements; and
(d) to perform any other functions as may be mutually agreed by the Audit Committee and the Board of Directors.
6.0 Secretary
The Secretary of the Company shall also be the Secretary of the Audit Committee. The Secretary shall be responsible for drawing up the
agenda in consultation with the chairperson and shall be responsible for keeping the minutes of the meeting of the Audit Committee,
circulating them to committee members and ensuring compliance with regulatory requirements. The agenda together with relevant
explanatory papers and documents are circulated to the committee members
60

Corporate Social Responsibility
MAA Holdings Berhad’s commitment in social corporate responsibility is seen through its involvement in charity work and community services.
Charity starts at home and we are doing exactly that. Activities are undertaken by its subsidiaries or associated entities.
In 2006, Malaysian Assurance Alliance Berhad (“MAA Assurance”) undertook the following activities:
1) Chinese New Year Gathering at Good Samaritan Home
Date : 8th February 2006
MAA Assurance General Insurance Division (Central Zone) and The Budimas Charitable Foundation jointly organised a Chinese New
Year gathering for the children of Good Samaritan Home. Lunch was provided as well as festive goodies and angpow were given to the
residents. There were also fun-fi lled games and activities for the children.
2) Cheque Presentation to The Budimas Charity Foundation
Date : 14th April 2006
MAA Assurance Executive Director/Chief Executive Offi cer Y.Bhg. Datuk Ramlan Abdul Rashid presented a cheque worth RM300,000 to
Budimas trustee, Y.Bhg. Datin Seri Maneesah Tunku Iskandar.
3) PENIAGAWATI Royal Charity Dinner
Date : 20th June 2006
MAA Assurance supported the Association of Bumiputera Woman in Business and Professions’ (PENIAGAWATI) Royal Charity Dinner with
a RM10,000 contribution. The dinner was organised to pool funds for the PENIAGAWATI Entrepreneur Fund. A portion of the proceeds was
channeled to the PENIAGAWATI Adopted Child Fund and Poor Children’s Welfare of Klang (PEYAKIN).
5) Cheque Presentation to The Malaysian Charity Draw II
Date : 19th July 2006
MAA Assurance supported the Malaysian Charity Draw II with a contribution of RM100,000. The fund raising campaign also included an
SMS donation drive, where it raised RM2 million in aid of 10 charity homes, one of which was MAA-MEDIcare.
6) MAA Assurance General Charity Treasure Hunt 2006
Date : 20th July 2006
The Treasure Hunt raised over RM43,500 which was used to purchase a dialysis machine. The machine was tagged on 20th October at
the Lions-MAA-MEDIcare Johor Bahru (1) Charity Dialysis Centre.
7) Blood Donation Drive
Date : 21st September 2006
The Blood Donation Drive is conducted annually since its inception in 1999, as part of MAA Assurance’s long-held tradition of giving back
to the community. Approximately 80 donors showed up to contribute to this worthy cause. The donors comprised MAA Assurance staff,
Life and General Agency Support members and also the public.
8) Christmas Outing to Port Dickson
Date : 11 & 12 December 2006
The children from Good Samaritan Home were treated to a Christmas Outing to Casa Rachado, Port Dickson which was sponsored by
MAA Assurance, General Insurance Division.
9) Seremban Half Marathon Cheque Presentation
Date : 5th July 2006
MAA Assurance was once again co-sponsors of the Seremban Half Marathon with a contribution of RM10,000. The marathon was held
on 19th July 2006 at Padang Negeri Sembilan, in conjunction with the 84th birthday celebration of the Yang di-Pertuan Besar Negeri
Sembilan.
61

Corporate Social Responsibility (continued)
Other Sponsorships included:-
1) Women’s Aid Organisation
Date : 3rd January 2006
An amount of RM5,000 was contributed towards the Centre for Refuge and Child Care.
2) Chinese New Year Celebrations 2006
Date : 19th January 2006
MAA Assurance contributed RM2,500 towards the purchase of mandarin oranges
to be given away to homes for elderly folk and underprivileged children.
3) Alicia Ngiam
Date : 25th April 2006
In a humanitarian gesture, RM5,000 was contributed towards the medical care of
Alicia who suffered critical injuries in an accident and the high medical bills were too
much for her single-parent mother.
4) Women Journalists Charity Nite
Date : 30 June 2006
MAA Assurance contributed RM3,000 towards MAA-MEDIcare and to assist a journalist
with kidney problems.
5) The Saint Vincent De Paul Society
Date : 22nd May 2006
RM1,000 was contributed towards the society’s efforts to provide tuition fees and grocery
for 3 poor patients seeking treatment at the JB MAA-MEDIcare Charity Dialysis Centre.
6) Amal Perdana Pernim 2006
Date : 31st May 2006
Contributed RM2,000 towards the care and welfare of children with HIV and AIDS.
7) Donation to Mr. Chong Tuck Meng
Date : 12th June 2006
Mr. Chong needed funds for surgery and treatment resulting from his paralysis due to an accident. MAA Assurance donated RM3,000
towards the cost of this medical treatment.
8) Lion’s Club
Date : 21st June 2006
MAA Assurance donated RM5,000 for their charitable activities.
9) Pertubuhan Kebajikan Anak-anak Yatim Malaysia (PENYATIM)
Date : 27th June 2006
We donated RM10,000 to PENYATIM, an association for disadvantaged children.
10) Team HPC Racing for the Children
Date : 7th August 2006
We sponsored RM30,000 for the Merdeka Millenium Endurance Race 2006 Fundraiser. The money was contributed towards The Budimas
Charitable Foundation and the Ronald McDonald Children’s Charity.
62

Corporate Social Responsibility (continued)
MAA Holdings adopted The Budimas Charitable Foundation (“Budimas”) in November 2001. Budimas is under the royal patronage of our
Queen, Duli Yang Maha Mulia Seri Paduka Baginda Raja Permaisuri Agong.
Activities undertaken by Budimas:
1) Cheque Presentation/Party at Miracle Home
Date : 23rd March 2006
Budimas presented a cheque worth RM30,000 to Miracle Home. This contribution marks the foundation’s 4th contribution as part of its
5-year commitment to support the home.
2) Cheque Presentation to Bethesda Home
Date : 22nd June 2006
A cheque of RM20,000 was presented to Bethesda Children’s Mission Home. This is Budimas’ 4th contribution to the Home, pledged in
2002 as part of its 5-year commitment to support the Home.
3) Cheque Presentation to Asrama Damai
Date : 9th September 2006
Budimas contributed RM30,000 to Asrama Damai Anak-Anak Yatim. This also marks Budimas’ 4th contribution to the Home as part of its
5-year commitment, pledged in 2002 to support the Home.
4) Commencement of Direct Debit Donor Programme
Date : 26th September 2006
Through the “Direct Debit Donor Programme”, we use direct marketing to recruit donors, where a monthly donation is debited via
the donors’ bank account or credit card account. Budimas has appointed APPCO Sdn Bhd to assist in the “Direct Debit Donor
Programme”.
5) Budimas 3rd Charity Raffl e Draw
Date : 4th October 2006
This is the 3rd year that Budimas is organising the Charity Raffl e Draw. Tickets were sold at RM5.00 each or RM50.00 per booklet. The
Charity Raffl e Draw is conducted yearly to raise funds for the foundation. Raised RM721,970.00.
6) ‘Buka Puasa’ Treat
Date : 13th October 2006
The children from Asrama Damai Anak-Anak Yatim enjoyed their ‘Buka Puasa’ at Charlie’s Reserve. The children were treated to a
sumptuous buffet and presented with gifts and ‘duit raya’.
7 ) Cheque Presentation to Good Samaritan Home
Date : 29th December 2006
A RM20,000 cheque was presented to Good Samaritan Home which marks Budimas’ 4th contribution in its 5-year commitment to
support the Home.
MAA-MEDIcare opened its doors to the public in 1994 to help those with end stage renal failure (ESRF). Eventhough during that time “dialysis”
was not a common word and was not understood by many, we were determined to help and set up our fi rst dialysis centre in Jalan Ipoh.
In the next 3 years, we established centres in Teluk Intan and Butterworth. Today, we have 11 satelite dialysis centres nationwide providing
treatment at subsidised fees.
Activities undertaken by MAA-MEDIcare:-
Charity Bazaar
Date : held once every two months, on Sunday mornings
The Charity Bazaar is held once every two months on Sunday mornings at Amcorp Mall. This is one of our most successful fund raising
activities as the public is very supportive of the Charity Bazaar by donating items and by turning up to hunt for bargains.
63

Financial
Statements
2006

Directors’ Report
The Directors have pleasure in submitting their report together with the audited fi nancial statements of the Group and the Company for the
fi nancial year ended 31 December 2006.
PRINCIPAL ACTIVITIES
The Company is principally engaged in investment holding and providing management services. The principal activities of the Group
consist of general and life insurance businesses, investment holding, hire purchase, leasing and other credit activities, unit trust, property
management, fund management and investment advisory, security and consultancy services.
There have been no signifi cant changes in the nature of these activities for the Group or the Company during the fi nancial year.
FINANCIAL RESULTS
GROUP
RM’000
COMPANY
RM’000
(Loss)/profi t for the fi nancial year (1,662) 15,467
DIVIDENDS
Since the end of the previous fi nancial year, the Company paid a fi rst and fi nal tax exempt dividend of 10 sen per share, totalling RM15,218,000,
on 9 August 2006 in respect of the fi nancial year ended 31 December 2005, as shown in the Directors’ report of that fi nancial year.
The Directors now recommend the payment of a fi rst and fi nal tax exempt dividend of 2 sen per share on 304,354,000 ordinary shares,
totalling RM6,087,000, in respect of the fi nancial year ended 31 December 2006, subject to the approval of the members at the forthcoming
Annual General Meeting of the Company.
ISSUE OF SHARES
On 8 September 2006, the Company made a bonus issue of 152,176,876 new ordinary shares of RM1 each on the basis of 1 new ordinary
share of RM1 each for every 1 existing ordinary shares of RM1 each, by capitalising RM11,744,389 from share premium and RM140,432,487
from retained earnings.
The newly issued shares rank pari passu in all respect with the existing shares of the Company.
RESERVES AND PROVISIONS
All material transfers to or from reserves or provisions during the fi nancial year are shown in the fi nancial statements.
DIRECTORS
The Directors who have held offi ce during the period since the date of the last report are:
Tunku Tan Sri Abdullah Ibni Almarhum Tuanku Abdul Rahman
Tunku Dato’ Ya’acob bin Tunku Tan Sri Abdullah
Tunku Dato’ Seri Iskandar bin Tunku Tan Sri Abdullah
Major General Lai Chung Wah (Rtd)
Dato’ Iskandar Michael bin Abdullah
Yeo Took Keat
General Dato’ Sri Hj Suleiman bin Mahmud (Rtd)
Datuk Razman Md Hashim bin Che Din Md Hashim (appointed on 01.07.2006)
Datuk Ramlan bin Abdul Rashid (appointed on 07.09.2006)
Muhamad Umar Swift (appointed on 07.09.2006)
Tan Sri Ahmad bin Mohd Don (appointed on 13.10.2006)
Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah (appointed on 10.01.2007)
Tan Sri Dato’ Ir Abu Zarim bin Haji Omar (resigned on 01.07.2006)
In accordance with Section 129(6) of the Companies Act, 1965, Tunku Tan Sri Abdullah Ibni Almarhum Tuanku Abdul Rahman and Major
General Lai Chung Wah (Rtd) retire and they, being eligible, offer themselves for re-election.
In accordance with Article 73 of the Company’s Articles of Association, Dato’ Iskandar Michael bin Abdullah retires at the forthcoming
Annual General Meeting and being eligible, offer himself for re-election.
In accordance with Article 79 of the Company’s Articles of Association, Datuk Razman Md Hashim bin Che Din Md Hashim, Muhamad
Umar Swift, Datuk Ramlan bin Abdul Rashid, Tan Sri Ahmad bin Mohd Don and Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah, who were
appointed during the period, retire at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.
65

Directors’ Report (continued)
DIRECTORS’ INTERESTS
According to the register of Directors’ shareholdings, particulars of interests of Directors who held offi ce at the end of the fi nancial year in
shares in the Company are as follows:
Company
Number of ordinary shares of RM1 each
At 1.1.2006/
At
date of appointment Acquired # Disposed 31.12.2006
Tunku Tan Sri Abdullah Ibni
Almarhum Tuanku Abdul Rahman
- Indirect * 51,889,342 51,889,342 - 103,778,684
Tunku Dato’ Seri Iskandar bin Tunku Tan Sri Abdullah
- Indirect * 51,889,342 51,889,342 - 103,778,684
Tunku Dato’ Ya’acob bin Tunku Tan Sri Abdullah
- Direct 618,750 618,750 - 1,237,500
- Indirect * 51,889,342 51,889,342 - 103,778,684
Yeo Took Keat 40,000 40,000 - 80,000
Datuk Ramlan bin Abdul Rashid 3,333 3,333 - 6,666
* Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965, held through Iternum Melewar Sdn Bhd, a company in which
the above mentioned Directors have an interest.
# Acquired via bonus issue of 152,176,876 new ordinary shares by the Company on 8 September 2006.
By virtue of the above mentioned Directors’ interests in the shares of the Company, they are also deemed to have a substantial interest in
the shares of the subsidiary companies of the Company to the extent the Company has an interest.
None of the other Directors in offi ce at the end of the fi nancial year held any interest in shares in, or debentures of, the Company or its
related corporations during the fi nancial year.
DIRECTORS’ BENEFITS
During and at the end of the fi nancial year, no arrangements subsisted to which the Company is a party, being arrangements with the
object or objects of enabling Directors of the Company to acquire benefi ts by means of the acquisition of shares in, or debentures of, the
Company or any other body corporate.
Since the end of the previous fi nancial year, no Director of the Company has received or become entitled to receive a benefi t (other than
Directors’ remuneration, fees paid to a company in which certain Directors have an interest and benefi ts provided to Directors as disclosed
in note 28 to the fi nancial statements) by reason of a contract made by the Company or a related corporation with the Director or with a
fi rm of which he is a member, or with a company in which he has a substantial fi nancial interest.
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS
Before the income statements and balance sheets were made out, the Directors took reasonable steps:
(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful
debts and satisfi ed themselves that all known bad debts had been written off and that adequate allowance had been made for
doubtful debts; and
(b) to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business their values as shown
in the accounting records of the Group and Company had been written down to an amount which they might be expected so to
realise.
At the date of this report, the Directors are not aware of any circumstances:
(a) which would render the amounts written off for bad debts or the amounts of the allowance for doubtful debts in the fi nancial statements
of the Group and Company inadequate to any substantial extent; or
(b) which would render the values attributed to current assets in the fi nancial statements of the Group and Company misleading; or
(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and Company
misleading or inappropriate.
66

Directors’ Report (continued)
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (continued)
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the
end of the fi nancial year which, in the opinion of the Directors, will or may affect the ability of the Group or the Company to meet their
obligations when they fall due.
For the purpose of the above paragraph, contingent or other liabilities do not include liabilities arising from contracts of insurance underwritten
in the ordinary course of business of the insurance subsidiary companies of the Company.
At the date of this report, there does not exist:
(a) any charge on the assets of the Group or Company which has arisen since the end of the fi nancial year which secures the liability of any
other person; or
(b) any contingent liability of the Group or Company which has arisen since the end of the fi nancial year.
At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the fi nancial statements
which would render any amount stated in the fi nancial statements misleading.
In the opinion of the Directors:
(a) the results of the Group’s and the Company’s operations during the fi nancial year were not substantially affected by any item,
transaction or event of a material and unusual nature other than the effects of changes in accounting policies as disclosed in note 44
to the fi nancial statements; and
(b) there has not arisen in the interval between the end of the fi nancial year and the date of this report any item, transaction or event of a
material and unusual nature likely to affect substantially the results of the operations of the Group or Company for the fi nancial year in
which this report is made.
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
(a) The Company announced on 29 September 2004 the corporate proposal on renounceable rights issue of up to 152,177,000 New
Irredeemable Preference Shares of RM1 each (“IPS”) (“Rights IPS”) together with up to 152,177,000 free detachable Ordinary Shares
of RM1 each (“Ordinary Shares”) (“Bonus Shares”) and up to 152,177,000 free detachable Warrants (“Warrants”) on the basis of one
(1) Rights IPS with one (1) free detachable Bonus Share and one (1) free detachable Warrant for every one (1) existing Ordinary Share
held in the Company at an entitlement date to be determined later (“Rights Issue of IPS”). The Rights Issue of IPS was approved by the
shareholders of the Company at the Extraordinary General Meeting held on 22 February 2005.
Given the uncertain sentiments in the Malaysian equity market prevailing then, the Company with the approval of the Securities
Commission (“SC”) had extended the completion of the proposed Rights Issue of IPS twice, fi rstly from 3 June 2005 to 31 December 2005
and subsequently from 1 January 2006 to 30 June 2006.
On 3 May 2006, the Company announced that after taking into consideration the then market sentiments and the market performance
of the ordinary shares of the Company, it has decided to abort the proposed Rights Issue of IPS.
Notwithstanding the abortion of the proposed Rights Issue of IPS, the Board of Directors of the Company on 3 May 2006 announced
that the Company will proceed with the Proposed Bonus Issue of up to 152,177,000 new ordinary shares of RM1 each as fully paid on the
basis of one (1) Bonus Share for every one (1) existing ordinary share held to the registered shareholders of the Company at the close of
business on an entitlement date to be determined and announced later (“Proposed Bonus Issue”).
The Proposed Bonus Issue will be issued via capitalization of up to RM152,177,000 from the following:
(i) up to RM11,744,000 from share premium account of the Company; and
(ii) up to RM140,433,000 from retained earnings of the Company.
The Proposed Bonus Issue was approved by the shareholders of the Company at the Annual General Meeting held on 21 June 2006.
The Company had on 19 July 2006 submitted an Application for listing of additional ordinary shares to be issued pursuant to the Proposed
Bonus Issue to Bursa Malaysia Securities Berhad (“Bursa Securities”). The approval was obtained on 1 August 2006 from Bursa Securities.
152,177,000 new ordinary shares of RM1 each were subsequently allotted on 8 September 2006 pursuant to the Proposed Bonus Issue.
(b) On 2 May 2006, a new subsidiary company namely MAA Takaful Berhad (“MAA Takaful”) was incorporated with an authorised share
capital of RM150,000,000 comprising 150,000,000 ordinary shares of RM1 each of which RM2 have been issued and fully paid-up.
MAA Takaful was incorporated pursuant to the approval of Bank Negara Malaysia (“BNM”) to carry on Takaful business in Malaysia with
joint venture partner, Solidarity Company BSC (C) (“Solidarity”).The equity participation of the Company and Solidarity in MAA Takaful
is 75% and 25% respectively.
67

Directors’ Report (continued)
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (continued)
The Company has subsequently on 21 September 2006 entered into a Subscription Agreement with Solidarity in respect of the subscription
of 100,000,000 shares of RM1 each (“Initial Shares”) in MAA Takaful by both parties within thirty (30) days from the date of the Subscription
Agreement or such other extended date as the parties may mutually agree.
The parties have also entered into a Shareholders’ Agreement to regularise their relationship as shareholders of MAA Takaful and the
conduct of the affairs of MAA Takaful. The Shareholders’ Agreement will take effect on the date the parties subscribe to their respective
shares in MAA Takaful.
MAA Takaful has on 16 November 2006 submitted an application to the SC for the increase in its paid up capital. The approval was
obtained from the SC on 15 January 2007.
(c) On 4 August 2006, the Company announced the Proposed Issuance of Commercial Papers (“CP”) and/or Medium Term Notes (“MTN”)
Programme of up to RM200 million (“Proposed Programme”).
The Proposed Programme will comprise the issuance of CP with tenors ranging from one (1) month to twelve (12) months and/or MTN
with tenors of more than one (1) year but not exceeding seven (7) years. The proceeds from the Proposed Programme will be used in
relation to fi nancing the Company’s investment in Takaful business, to repay certain existing bank borrowings of the Company and its
subsidiary companies, to fi nance redemption of its existing RM120 million Serial Fixed Rate Bonds maturing on 21 August 2007, to prefund
the debt service reserve account to be established for the purposes of the Proposed Programme and to fi nance working capital
of the Company.
The approval for Proposed Programme was obtained on 28 August 2006 from Securities Commission (“SC”).
On 5 December 2006, the Company submitted an application to the SC for the following variations to the principal terms and conditions
of the Proposed Programme:
i) to secure the issuance under the Proposed Programme by a bank gurantee facility from DBS Bank Lt, Labuan Branch (“DBS Bank”)
up to the maximum aggregate principal amount of the United States Dollars equivalent to RM200 million; and
ii)
to vary the utilisation of proceeds of the Proposed Programme, where among others the Company’s investment in Takaful business
will be fi nanced from internally generated fund
The SC has via its letter dated 22 December 2006 approved the above stated variations.
On 8 January 2007, the Company successfully issued RM200 million nominal amount of Medium Terms Notes up to a tenure of 5 years.
(d) On 22 September 2006, Columbus Capital Singapore Pte Ltd (“CCS”), a new wholly-owned subsidiary company of MAA International
Investment Ltd, which in turn is a wholly-owned subsidiary of the Company, entered into a conditional subscription agreement with
Columbus Capital Pty Limited (“CCPL”) to subscribe up to 20.0 million Series A Preference Shares at an issue price of AUD1.00 each,
representing up to 50% equity interest in CCPL for a total cash consideration of AUD20.0 million or equivalent to approximately RM57.0
million.
CCPL was incorporated in Australia under the Corporation Act 2001 on 4 May 2006.
CCS subscribed 15.0 million Series A Preference Shares in CCPL on 6 October 2006, representing 42.86% equity interest in CCPL.
(e) MAA International Assurance Ltd (“MAAIA”), a wholly-owned subsidiary company of MAA Corporation Sdn Bhd together with its
subsidiary company, Tuang Thai Co. Ltd had on 14 September 2006 entered into a Share Sale and Purchase Agreement with Mr. Krisana
Kritmanorote for the disposal of a total 4,799,800 ordinary shares of Thai Baht 10.00 each, representing the 42.15% equity interest in MAAKK
Wealth Management Co. Ltd (“MAAKK”), an associated company, for a total cash consideration of Thai Baht 47,998 (equivalent to
approximately RM4,713) and the agreed repayment of Thai Baht 39,000,000 (equivalent to approximately RM3,829,800) of the amount
owing by MAAKK to MAAIA. The disposal was completed on 17 October 2006.
AUDITORS
The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in offi ce.
Signed on behalf of the Board of Directors in accordance with their resolution dated 27 April 2007.
TUNKU DATO’ YA’ACOB BIN TUNKU TAN SRI ABDULLAH
DIRECTOR
MUHAMAD UMAR SWIFT
DIRECTOR
68
Kuala Lumpur
27 April 2007

Statement By Directors Pursuant To
Section 169(15) Of The Companies Act, 1965
We, Tunku Dato’ Ya’acob bin Tunku Tan Sri Abdullah and Muhamad Umar Swift, two of the Directors of MAA Holdings Berhad, state that, in
the opinion of the Directors, the fi nancial statements set out on pages 71 to 162 are drawn up so as to give a true and fair view of the state of
affairs of the Group and the Company as at 31 December 2006 and of the results and the cash fl ows of the Group and the Company for the
fi nancial year ended on that date in accordance with Malaysian Accounting Standard Board (“MASB”) Approved Accounting Standards
in Malaysia for Entities Other than Private Entities and the provisions of the Companies Act, 1965.
Signed on behalf of the Board of Directors in accordance with their resolution dated 27 April 2007.
TUNKU DATO’ YA’ACOB BIN TUNKU TAN SRI ABDUL LAH
DIRECTOR
MUHAMAD UMAR SWIFT
DIRECTOR
Kuala Lumpur
Statutory Declaration Pursuant To
Section 169(16) Of The Companies Act, 1965
I, Muhamad Umar Swift, being the director primarily responsible for the fi nancial management of MAA Holdings Berhad, do solemnly and
sincerely declare that the fi nancial statements set out on pages 71 to 162 are, in my opinion correct, and I make this solemn declaration
conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
MUHAMAD UMAR SWIFT
Subscribed and solemnly declared by the abovenamed Muhamad Umar Swift at Kuala Lumpur in Malaysia on 27 April 2007, before me.
LEONG TUCK ONN
COMMISSIONER FOR OATHS
69

Report Of The Auditors To The Members Of
MAA Holdings Berhad (Company No. 471403 A) (Incorporated in Malaysia)
We have audited the fi nancial statements set out on pages 71 to 162. These fi nancial statements are the responsibility of the Company’s
Directors. It is our responsibility to form an independent opinion, based on our audit, on these fi nancial statements and to report our opinion
to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility
to any other person for the content of this report.
We conducted our audit in accordance with approved auditing standards in Malaysia. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes assessing
the accounting principles used and signifi cant estimates made by the Directors, as well as evaluating the overall fi nancial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion:
(a) the fi nancial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and MASB Approved
Accounting Standards in Malaysia for Entities Other than Private Entities so as to give a true and fair view of:
and
(i) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the fi nancial statements; and
(ii) the state of affairs of the Group and of the Company as at 31 December 2006 and of the results and cash fl ows of the Group and
Company for the fi nancial year ended on that date;
(b) the accounting and other records and the registers required by the Act to be kept by the Company and by the subsidiary companies
of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
The names of the subsidiary companies of which we have not acted as auditors are indicated in note 10 to the fi nancial statements. We
have considered the fi nancial statements of these subsidiary companies and the auditors’ reports thereon.
We are satisfi ed that the fi nancial statements of the subsidiary companies that have been consolidated with the Company’s fi nancial
statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated fi nancial statements
and we have received satisfactory information and explanations required by us for those purposes.
The auditors’ reports on the fi nancial statements of the subsidiary companies were not subject to any qualifi cation and did not include any
comment made under subsection 3 of section 174 of the Act.
PRICEWATERHOUSECOOPERS
(No. AF: 1146)
Chartered Accountants
JAYARAJAN A/L U. RATHINASAMY
(No. 2059/06/08 (J))
Partner of the firm
Kuala Lumpur
27 April 2007
70

Balance Sheets As At 31 December 2006
GROUP
COMPANY
Note 2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
ASSETS
GENERAL AND SHAREHOLDERS’ FUND ASSETS
Property, plant and equipment 4(a) 97,578 97,560 2,825 2,029
Intangible assets 5 8,839 6,189 - -
Investment properties 6(a) 48,423 55,408 - -
Financial assets
Investments
- at fair value through profi t or loss 7(a) 86,370 174,609 11,610 10,879
- available-for-sale 7(a) 181,740 133,120 - -
- held to maturity 7(a) 21,027 10,714 - -
Loans and receivables 8(a) 380,629 354,381 136,846 146,847
Insurance receivables 9(a) 85,046 81,313 - -
Subsidiary companies 10 - - 252,076 252,076
Associated companies 11 53,339 14,029 8,593 31,344
Tax recoverable 28,301 18,962 4,255 1,792
Deferred tax assets 12 6,890 9,597 6,847 690
Fixed and call deposits 37(a) 115,230 140,007 1,230 2,385
Cash and bank balances 36 27,165 28,935 972 542
TOTAL GENERAL AND
SHAREHOLDERS’ FUND ASSETS 1,140,577 1,124,824 425,254 448,584
TOTAL LIFE FUND ASSETS 6,026,649 5,425,679 - -
TOTAL ASSETS 7,167,226 6,550,503 425,254 448,584
LIABILITIES
GENERAL AND SHAREHOLDERS’ FUND LIABILITIES
Provision for outstanding claims 13(a) 305,027 287,333 - -
Insurance payables 14(a) 77,372 62,514 - -
Financial liabilities
Borrowings
- bonds - unsecured 16 30,000 60,000 30,000 60,000
- term loans 17 69,935 67,155 30,000 30,000
- bank overdrafts – unsecured 18 26,002 14,293 17,382 12,579
Trade and other payables 15(a) 99,347 74,817 2,076 458
Current tax liabilities 14,321 9,417 - -
Deferred tax liabilities 12 1,890 4,805 - -
TOTAL GENERAL AND
SHAREHOLDERS’ FUND LIABILITIES 623,894 580,334 79,458 103,037
TOTAL LIFE FUND LIABILITIES 635,138 537,966 - -
1,259,032 1,118,300 79,458 103,037
Unearned premium reserves 19 145,974 151,349 - -
Life policyholders’ fund 20 5,378,381 4,874,075 - -
Life fund reserves 23(b) 13,130 13,638 - -
5,537,485 5,039,062 - -
TOTAL LIABILITIES 6,796,517 6,157,362 79,458 103,037
71

Balance Sheets As At 31 December 2006 (continued)
EQUITY
Capital and reserve attributable to the
Company’s equity holders
GROUP
COMPANY
Note 2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Share capital 21 304,354 152,177 304,354 152,177
Share premium 22 - 11,744 - 11,744
Retained earnings 23(a) 67,688 225,515 41,442 181,626
Reserves 23(a) (3,786) 1,930 - -
368,256 391,366 345,796 345,547
Minority interest 2,453 1,775 - -
TOTAL EQUITY 370,709 393,141 345,796 345,547
TOTAL LIABILITIES AND EQUITY 7,167,226 6,550,503 425,254 448,584
The accompanying notes are an integral part of these fi nancial statements.
72

Income Statements
For The Financial Year Ended 31 December 2006
GROUP
COMPANY
Note 2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
OPERATING REVENUE 24 2,283,885 2,205,420 59,036 93,314
SHAREHOLDERS’ FUND
Investment income 25(a) 3,573 3,305 56,168 90,634
Operating revenue from non-insurance subsidiaries 26 59,592 54,590 - -
Other operating (expenses)/income-net 27(a) (18,606) 24,459 (20,523) 550
Management expenses 28 (67,125) (61,596) (14,283) (13,001)
SURPLUS TRANSFERRED FROM
INSURANCE REVENUE ACCOUNTS:
(22,566 ) 20,758 21,362 78,183
General insurance 5,578 10,939 - -
Life insurance 34,323 20,226 - -
Profi t from operations 17,335 51,923 21,362 78,183
Finance costs 29 (11,372 ) (9,859 ) (8,205 ) (8,574 )
Share of loss of associated companies (2,853 ) (931 ) - -
PROFIT BEFORE TAXATION 3,110 41,133 13,157 69,609
Taxation 30 (4,772 ) 1,716 2,310 (21,260 )
(LOSS)/PROFIT FOR THE FINANCIAL YEAR (1,662 ) 42,849 15,467 48,349
Attributable to:
- Equity holders of the Company (2,176) 42,619 15,467 48,349
- Minority interest 514 230 - -
(1,662 ) 42,849 15,467 48,349
GROSS DIVIDENDS PER SHARE (sen) 31 2.0 10.0 2.0 10.0
EARNINGS PER SHARE FOR
(LOSS)/PROFIT ATTRIBUTABLE TO THE
EQUITY HOLDERS OF THE
COMPANY DURING THE FINANCIAL YEAR (sen)
- basic 32 (0.7) 14.0
The accompanying notes are an integral part of these fi nancial statements.
73

General Insurance Revenue Account
For The Financial Year Ended 31 December 2006
GROUP
Marine,
Motor Motor Aviation Misce-
Note Fire vehicles cycles & Transit IIlaneous Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Gross premium 77,996 203,898 42,197 33,944 94,602 452,637
Reinsurance (48,673 ) (15,418) (6,196 ) (29,077 ) (30,385 ) (129,749)
Net premium 29,323 188,480 36,001 4,867 64,217 322,888
(Increase)/decrease in
unearned premium reserves 19 (464 ) 8,524 1,032 (1,689 ) (2,606 ) 4,797
Earned premium 28,859 197,004 37,033 3,178 61,611 327,685
Net claims incurred 33 (18,435 ) (150,644) (33,834 ) (1,070 ) (28,233 ) (232,216)
Net commission 73 (20,248) (3,374 ) 1,656 (8,468 ) (30,361)
Underwriting surplus/(defi cit) before
management expenses 10,497 26,112 (175 ) 3,764 24,910 65,108
Management expenses 28 (84,033 )
Underwriting defi cit (18,925 )
Investment income 25(b) 23,921
Other operating income - net 27(b) 582
Surplus transferred to Income Statement 5,578
The accompanying notes are an integral part of these fi nancial statements.
74

General Insurance Revenue Account
For The Financial Year Ended 31 December 2005
GROUP
Marine,
Motor Motor Aviation Misce-
Note Fire vehicles cycles & Transit IIlaneous Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Gross premium 83,089 215,689 41,466 23,762 95,959 459,965
Reinsurance (53,327 ) (14,394) (6,036 ) (18,897 ) (39,545 ) (132,199)
Net premium 29,762 201,295 35,430 4,865 56,414 327,766
Increase in unearned
premium reserves 19 (1,480 ) (8,798) (3,521 ) (355 ) (3,875 ) (18,029)
Earned premium 28,282 192,497 31,909 4,510 52,539 309,737
Net claims incurred 33 (17,230 ) (128,840) (16,381 ) (2,149 ) (18,220 ) (182,820)
Net commission (91 ) (21,295) (3,447 ) (444 ) (7,009 ) (32,286)
Underwriting surplus before
management expenses 10,961 42,362 12,081 1,917 27,310 94,631
Management expenses 28 (78,528 )
Underwriting surplus 16,103
Investment income 25(b) 23,267
Other operating expenses - net 27(b) (28,431 )
Surplus transferred to Income Statement 10,939
The accompanying notes are an integral part of these fi nancial statements.
75

Life Fund Balance Sheet As At 31 December 2006
ASSETS
GROUP
Note 2006 2005
RM’000
RM’000
Property, plant and equipment 4(b) 281,269 264,193
Intangible assets 5(b) 2,685 -
Investment properties 6(b) 686,514 672,894
Financial assets
Investments
- at fair value through profi t or loss 7(b) 670,399 782,926
- available-for-sale 7(b) 1,540,446 1,259,685
- held to maturity 7(b) 514,234 346,734
Loans and receivables 8(b) 1,115,663 986,401
Insurance receivables 9(b) 40,262 46,701
Tax recoverable 21,636 10,994
Deferred tax assets 12 10,305 13,694
Fixed and call deposits 37(b) 551,038 680,872
Cash and bank balances 36 50,203 27,762
Investment-linked fund assets 34 541,995 332,823
TOTAL LIFE FUND ASSETS 6,026,649 5,425,679
LIABILITIES
Provision for outstanding claims 13(b) 16,729 14,439
Provision for life agents’ retirement benefi ts 35 3,910 5,001
Insurance payables 14(b) 460,231 414,362
Trade and other payables 15(b) 122,708 89,907
Current tax liabilities 4,082 149
Deferred tax liabilities 12 3,948 4,101
Investment-linked fund liabilities 34 23,530 10,007
TOTAL LIFE FUND LIABILITIES 635,138 537,966
LIFE POLICYHOLDERS’ FUND 20 5,378,381 4,874,075
RESERVES 23(b) 13,130 13,638
5,391,511 4,887,713
TOTAL LIFE FUND LIABILITIES AND LIFE POLICYHOLDERS’ FUND 6,026,649 5,425,679
The accompanying notes are an integral part of these fi nancial statements.
76

Life Insurance Revenue Account
For The Financial Year Ended 31 December 2006
GROUP
Note 2006 2005
RM’000
RM’000
Gross premium 1,447,960 1,422,936
Reinsurance (14,442) (19,765)
Net premium 1,433,518 1,403,171
Gross benefi ts paid and payable:
Death (53,829) (42,384)
Maturity (495,897) (489,462)
Medical (3,903) -
Cash bonus (182,775) (163,260)
Surrender (210,051) (162,451)
Annuity (568) (701)
Others (60,186) (53,415)
Reinsurance recoveries 10,046 7,162
Net benefi ts paid and payable (997,163) (904,511)
436,355 498,660
Commission and agency expenses (137,245) (142,787)
Management expenses 28 (105,213) (90,900)
193,897 264,973
Investment income 25(c) 277,341 229,408
Other operating income/(expenses) - net 27(c) 32,597 (26,800)
Surplus from operations 503,835 467,581
Finance costs 29 (43) (15)
Surplus before taxation 503,792 467,566
Taxation 30 (17,652) (7,525)
Surplus for the fi nancial year after taxation 486,140 460,041
Exchange reserve from investment-linked fund (1,218) 43
Surplus/(defi cit) from investment-linked fund 34 54,366 (21,586)
Net surplus before changes in policy reserves for the fi nancial year 539,288 438,498
Life policyholders’ fund at beginning of fi nancial year: 20
- as previously stated 4,874,075 4,447,086
- adjustments due to change in accounting policies (659) 8,717
- as restated 4,873,416 4,455,803
Surplus transferred to Income Statement 20 (34,323) (20,226)
Life policyholders’ fund at end of fi nancial year 20 5,378,381 4,874,075
The accompanying notes are an integral part of these fi nancial statements.
77

Consolidated Statement Of Changes In Equity
For The Financial Year Ended 31 December 2006
2006
Attributable to equity holders of the Company
Issued and fully paid
ordinary shares of
RM 1 each
Number Nominal Share Retained Minority
Note of shares value premium Reserves earnings interest Total
‘000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Balance as at 1 January 152,177 152,177 11,744 1,930 225,515 1,775 393,141
Issue of bonus shares during the
fi nancial year 21, 22, 23(a) 152,177 152,177 (11,744) - (140,433) - -
Increase arising from additional
investment in subsidiary company
during the fi nancial year - - - - - 164 164
Currency translation differences
arising during the fi nancial year 23(a ) - - - (5,325) - - (5,325)
Net change in available-for-sale
fi nancial assets 23(a) - - - (116) - - (116)
Impairment of property, plant and
equipment, net of tax 23(a) - - - (275) - - (275)
Loss for the fi nancial year - - - - (2,176 ) 514 (1,662 )
Dividends paid for the fi nancial year
ended 31 December 2005 31 - - - - (15,218) - (15,218)
Balance as at 31 December 304,354 304,354 - (3,786 ) 67,688 2,453 370,709
2005
Balance as at 1 January
- as previously stated 152,177 152,177 11,744 (93) 194,644 1,539 360,011
- adjustments due to changes in
accounting policies 23(a) - - - 2,062 11,079 - 13,141
- restated 152,177 152,177 11,744 1,969 205,723 1,539 373,152
Increase arising from subsidiary
companies acquired during the
fi nancial year - - - - - 6 6
Currency translation differences
arising during the fi nancial year 23(a) - - - 215 - - 215
Net change in available-for-sale
fi nancial assets 23(a) - - - (254) - - (254)
Profi t for the fi nancial year - - - - 42,619 230 42,849
Dividends paid for the fi nancial year
ended 31 December 2004 31 - - - - (22,827) - (22,827)
Balance as at 31 December 152,177 152,177 11,744 1,930 225,515 1,775 393,141
The accompanying notes are an integral part of these fi nancial statements.
78

Company Statement Of Changes In Equity
For The Financial Year Ended 31 December 2006
Issued and fully paid
ordinary shares of Non-
RM 1 each distributable Distributable
Number Nominal Share Retained
Note of shares value premium earnings Total
‘000 RM’000 RM’000 RM’000 RM’000
2006
Balance as at 1 January 152,177 152,177 11,744 181,626 345,547
Issue of bonus shares
during the fi nancial year 21, 22, 23(a) 152,177 152,177 (11,744) (140,433) -
Profi t for the fi nancial year - - - 15,467 15,467
Dividends paid for the fi nancial year
ended 31 December 2005 31 - - - (15,218) (15,218)
Balance as at 31 December 304,354 304,354 - 41,442 345,796
2005
Balance as at 1 January
- as previously stated 152,177 152,177 11,744 216,192 380,113
- prior year adjustment 23(a) - - - (59,400) (59,400)
- adjustments due to changes in
accounting policies 23(a) - - - (688) (688)
- restated 152,177 152,177 11,744 156,104 320,025
Profi t for the fi nancial year - - - 48,349 48,349
Dividends paid for the fi nancial year
ended 31 December 2004 31 - - - (22,827) (22,827)
Balance as at 31 December 152,177 152,177 11,744 181,626 345,547
The accompanying notes are an integral part of these fi nancial statements.
79

Consolidated Cash Flow Statement
For The Financial Year Ended 31 December 2006
CASH FLOWS FROM OPERATING ACTIVITIES
GROUP
Note 2006 2005
RM’000
RM’000
(Loss)/profi t for the fi nancial year (1,662 ) 42,849
Adjustments for:
Loss/(gain) on disposal of:
- investments - net 19,532 68,884
- investment properties 681 (12,974)
Fair value (gain)/loss in fi nancial assets at fair value through profi t or loss (109,222) 71,218
Fair value loss/(gain) in investment properties 21,737 (261)
Impairment on fi nancial asset held-to-maturity 3,656 10,000
(Increase)/decrease in value of investments in investment-linked business (42,435) 9,741
Property, plant and equipment:
- depreciation 20,355 20,078
- loss/(gain) on disposal 97 (98)
- write off 7 433
Amortisation of intangible assets 1,829 347
Amortisation of leases 62 -
Impairment loss on property, plant and equipment 17,011 -
(Decrease)/increase in unearned premium reserves (4,797) 18,029
Life fund surplus before changes in policy reserves 539,288 438,498
Transfer of life fund surplus to income statement (34,323) (20,226)
Interest expense 11,415 9,874
Investment income (323,696) (267,929)
Share of loss/(profi t) of associated companies 2,853 931
Loss on disposal of associated company 793 -
Provision for agents’ retirement benefi ts 393 1,490
Bad debts write off 10,737 424
(Write back of)/allowance for doubtful debts on hire purchase
and lease receivables (1,061) 1,781
Allowance for doubtful debt on loans 20,892 141
Other provisions - 19,602
Tax expense 25,764 7,158
Minority interest 164 236
Profi t from operations before changes in operating assets and liabilities 180,070 420,226
Decrease/ (increase) in other receivables 24,801 (48,771)
Increase/(decrease) in insurance, trade and other payables 128,193 (92,528)
Increase/(decrease) in provision for outstanding claims 19,984 (27,082)
Decrease/(increase) in fi xed and call deposits 163,854 (46,738)
Increase in loans (77,668) (114,745)
Interest paid (11,415) (9,874)
Dividends received 37,221 56,960
Interest received 139,615 190,726
Other investment income received 17,968 13,079
Payments of agents’ retirement benefi ts (1,484) (2,064)
Proceeds from disposal of investments 1,537,247 1,744,667
Purchases of investments (1,929,484) (2,018,023)
Purchase of intangible assets (4,577) -
Purchases of investment properties (84,245) (75,473)
Proceeds from disposal of investment properties 4,844 70,778
Cash generated from operations 144,924 61,138
Income taxes paid (32,163) (48,328)
NET CASH INFLOW FROM OPERATING ACTIVITIES 38 112,761 12,810
80

Consolidated Cash Flow Statement
For The Financial Year Ended 31 December 2006 (continued)
CASH FLOWS FROM INVESTING ACTIVITIES
GROUP
Note 2006 2005
RM’000
RM’000
Purchases of property, plant and equipment (15,927) (12,203)
Proceeds from disposal of property, plant and equipment 635 1,859
Proceeds from disposal of associated company 5 -
Investment in associated companies (42,962) (11,379)
NET CASH OUTFLOW FROM INVESTING ACTIVITIES 38 (58,249 ) (21,723 )
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (15,218) (22,827)
Term loan obtained 2,780 37,155
Repayment of bond (30,000) (20,000)
NET CASH OUTFLOW FROM FINANCING ACTIVITIES 38 (42,438 ) (5,672 )
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 38 12,074 (14,585 )
CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR 48,207 62,792
CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 36 60,281 48,207
The accompanying notes are an integral part of these fi nancial statements.
81

Company Cash Flow Statement
For The Financial Year Ended 31 December 2006
CASH FLOWS FROM OPERATING ACTIVITIES
GROUP
Note 2006 2005
RM’000
RM’000
Profi t for the fi nancial year 15,467 48,349
Adjustments for:
Net fair value (gain)/loss of fi nancial assets at fair value through profi t or loss (731) 2,021
Property, plant and equipment
- depreciation 451 453
- write off 6 -
- loss on disposal 56 105
Interest expense 8,205 8,574
Interest income (7,268) (8,134)
Dividend income (48,900) (82,500)
Impairment loss on associated company 24,065 -
Tax expense (2,310) 21,260
Loss from operations before changes in operating assets and liabilities (10,959 ) (9,872 )
Decrease in loans 103 79
Increase in other receivables (4,225) (210)
Increase/(decrease) in other payables 1,618 (4)
Decrease/(increase) in current balances with subsidiary companies 46,537 (1,495)
Cash generated from/(used in) operations 33,074 (11,502 )
Interest paid (8,205) (8,574)
Interest received 1,254 278
Dividends received 16,200 59,400
Income tax paid (10) (29)
NET CASH INFLOW FROM OPERATING ACTIVITIES 42,313 39,573
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of property, plant and equipment 52 105
Purchase of property, plant and equipment (1,361) (424)
Proceeds from withdrawal of fi xed and call deposits 1,155 720
Purchase of investment in quoted equity securities - (6,934)
Investment in associated company (1,314) -
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (1,468 ) (6,533 )
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of bonds (30,000) (20,000)
Dividends paid (15,218) (22,827)
NET CASH OUTFLOW FROM FINANCING ACTIVITIES (45,218 ) (42,827 )
NET DECREASE IN CASH AND CASH EQUIVALENTS (4,373 ) (9,787 )
CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR (12,037 ) (2,250 )
CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 36 (16,410 ) (12,037 )
The accompanying notes are an integral part of these fi nancial statements.
82

Notes To The Financial Statements
- 31 December 2006
1 PRINCIPAL ACTIVITIES AND GENERAL INFORMATION
The Company is principally engaged in investment holding and providing management services. The principal activities of the
Group consist of general and life insurance businesses, investment holding, hire purchase, leasing and other credit activities, unit
trust, property management, fund management and investment advisory, security and consultancy services.
There have been no signifi cant changes in the nature of these activities for the Group and the Company during the fi nancial year.
The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Board of the
Malaysia Securities Exchange Berhad.
The registered offi ce and principal place of business of the Company are as follows:
Registered office
Suite 20.03, 20th Floor
Menara MAA
12, Jalan Dewan Bahasa
50460 Kuala Lumpur
Principal place of business
23rd Floor, Menara MAA
12, Jalan Dewan Bahasa
50460 Kuala Lumpur
The fi nancial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 27
April 2007.
2 SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies have been used consistently in dealing with items which are considered material in relation to the
fi nancial statements, unless otherwise stated.
(a)
Basis of preparation
The fi nancial statements have been prepared under the historical cost convention modifi ed by the valuation of investments
in the investment-linked business at market value, the revaluation of investment properties, remeasurement at fair value of
available-for-sale fi nancial assets, and fi nancial assets and fi nancial liabilities held at fair value through profi t or loss. The
fi nancial statements also comply with the Financial Reporting Standards (“FRS”), the MASB Approved Accounting Standards
in Malaysia for Entities Other than Private Entities and the provisions of the Companies Act, 1965, in all material aspects.
The preparation of fi nancial statements in conformity with the MASB Approved Accounting Standards in Malaysia for Entities
Other than Private Entities requires the Directors to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the fi nancial statements, and the
reported amounts of revenues and expenses during the reported fi nancial year. Although these estimates are based on the
Directors’ best knowledge of current events and actions, actual results may differ from those estimates.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signifi cant
to the consolidated fi nancial statement, are disclosed in note 3 to the fi nancial statements.
The accounting policies adopted are consistent with those of the previous fi nancial year except as noted below:
(a)
Investment property
In the fi nancial year ended 31 December 2006, the Group reassessed their judgement over the identifi cation of
these properties used in the generation of investment income and those properties held for administrative purposes
(see note 3(b) to the fi nancial statements). This change has resulted in the reclassifi cation of certain properties from
investment properties to property, plant and equipment.
(b)
Property, plant and equipment
Revaluation of land and buildings
Following the Group’s reassessment of investment properties which resulted in the reclassifi cation of certain properties
to property, plant and equipment, the Group has adopted the revaluation model on land and buildings classifi ed as
property, plant and equipment.
83

Notes To The Financial Statements
- 31 December 2006 (continued)
2 SIGNIFICANT ACCOUNTING POLICIES (continued)
(a)
Basis of preparation (continued)
These changes are applied retrospectively and the effects of these changes are disclosed in note 43 to the fi nancial
statements.
(i)
Standards, amendments to published standards and interpretations to existing standards that are not yet effective
and have not been early adopted
The new standards, amendments to published standards and interpretations that are mandatory for the Group’s
and Company’s fi nancial periods beginning on or after 1 January 2007 or later periods, but which the Group and
Company has not early adopted, are as follows:
Amendment to FRS 1192004 Employee Benefi ts – Actuarial Gains and Losses, Group Plans and Disclosures
(effective for accounting periods beginning on or after 1 January 2007). This amendment introduces the option
of an alternative recognition approach for actuarial gains and losses. It may impose additional recognition
requirements for multi-employer plans where insuffi cient information is available to apply defi ned benefi t
accounting. It also adds new disclosure requirements. The Group currently does not have any defi ned benefi t
plans but will apply the amendment if applicable, from fi nancial periods beginning on 1 January 2007.
Amendment to FRS 121: The Effects of Changes in Foreign Exchange Rates - Net Investment in a Foreign
Operations (effective for accounting periods beginning on or after 1 July 2007). This amendment requires
exchange differences on monetary items that form part of the net investment in a foreign operation to be
recognised in equity instead of in profi t or loss regardless of the currency in which these items are denominated
in. The Group will apply the amendment if applicable, from fi nancial periods beginning on 1 January 2008.
(ii)
Standards that are not yet effective and not relevant, and interpretations to existing standards that are effective for
the Group’s and Company’s operations
The standards that are not effective and not relevant and intepretations to existing standards that are effective for
the Group’s and Company’s operations are as below. The interpretations to the existing standards are effective for
the fi nancial period beginning on 1 January 2006.
• FRS 6: Exploration for and Evaluation of Mineral Resources (effective for accounting periods beginning on or
after 1 January 2007).
• IC 107: Introduction to Euro
• IC 110: Government Assistance – No Specifi c Relation to Operating Activities
• IC 112: Consolidation – Special Purpose Entities
• IC 113: Jointly Controlled Entities – Non-Monetary Contributions by Venturers
• IC 115: Operating Leases – Incentives
• IC 121: Income Taxes – Recovery of Revalued Non-Depreciable Assets
• IC 125: Income Taxes – Changes in the Tax Status of an Entity or its Shareholders
• IC 127: Evaluating the Substance of Transactions involving the Legal Form of a Lease
• IC 129: Disclosure – Service Concession Arrangements
• IC 131: Revenue – Barter Transactions Involving Advertising Services
• IC 132: Intangible Assets – Web Site Costs
(b)
Basis of consolidation
The consolidated fi nancial statements include the fi nancial statements of the Company and all its subsidiary companies
made up to the end of the fi nancial year.
Subsidiary companies are those companies in which the Group has power to exercise control over the fi nancial and
operating policies so as to obtain benefi ts from their activities generally accompanying a shareholding of more than one
half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are
considered when assessing whether the Group controls another entity. Subsidiary companies are consolidated from the
date on which control is transferred to the Group and are de-consolidated from the date that control ceases.
Subsidiary companies are consolidated using the purchase method of accounting, except for the acquisition of Malaysian
Assurance Alliance Berhad (“MAA”) which was consolidated using the merger method of accounting in accordance with
Malaysian Accounting Standard (“MAS”) No. 2 - Accounting for Acquisitions and Mergers, the extant accounting standard
prevailing at the time of the merger.
For acquisition of subsidiary companies made prior to 1 January 2005, the excess or defi cit of the acquisition cost over the
fair values of the Group’s share of the subsidiary companies’ identifi able net assets as at the date of acquisition is written off
to reserves in the fi nancial year of acquisition.
84
Under the merger method of accounting prescribed by MAS 2, the results of the subsidiary companies are presented as if the
merger had been effected throughout the current and previous fi nancial years. On consolidation, the difference between
the carrying value of the investment in the subsidiary company over the nominal value of the shares acquired is taken to
merger reserve.

Notes To The Financial Statements
- 31 December 2006 (continued)
2 SIGNIFICANT ACCOUNTING POLICIES (continued)
(b)
Basis of consolidation (continued)
The Group has taken advantage of the exemption provided by FRS 3 – Business Combinations to apply this Standard
prospectively. Accordingly, business combinations entered into prior to 1 January 2006 have not been restated to comply
with this Standard. In addition, FRS 3 requires business combinations to be accounted for using acquisition accounting
method.
Under the purchase method of accounting, the results of subsidiary companies acquired or disposed off during the fi nancial
year are included from the date of acquisition up to the date of disposal. The cost of acquisition is measured at fair
value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs
directly attributable to the acquisition. Identifi able assets acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any
minority interests. When more than one exchange transaction is involved, any adjustment to the fair values of the subsidiary’s
identifi able assets, liabilities and contingent liabilities relating to previously held interest of the Group is accounted for as a
revaluation.
The excess of the cost of acquisition over the fair value of the Group’s share of the identifi able net assets acquired at the
date of acquisition is recorded as goodwill (see note 2(k)). If the cost of acquisition is less than the fair value of the net assets
of the subsidiary company acquired, the difference is recognised directly in the income statement.
Intragroup transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies
of subsidiaries have been changed to ensure consistency of accounting policies with those of the Group.
Minority interest represent that portion of the profi t or loss and net assets of a subsidiary attributable to equity interests that
are not owned directly or indirectly through subsidiaries by the parent. It is measured at the minorities’ share of the fair
value of the subsidiaries identifi able assets and liabilities at the acquisition date and the minorities’ share of changes in the
subsidiaries equity since that date.
The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and the Group’s share of its net
asset as of the date of disposal including the cumulative amount of any exchange differences that relate to the subsidiary
is recognised in the consolidated income statement.
(c)
Associated companies
Associated companies are companies in which the Group exercises signifi cant infl uence but which it does not control,
generally accompanying a shareholding of between 20% to 50% voting rights. Signifi cant infl uence is the power to
participate in the fi nancial and operating policy decisions of the associated companies but not control over those policies.
Investments in associated companies are accounted for in the consolidated fi nancial statements using the equity method
of accounting. The Group’s investment in associated companies includes goodwill identifi ed on acquisition, net of any
accumulated impairment loss (see note 2(k)).
Equity accounting involves recognising in the income statement, the Group’s share of the results of associated companies
for the fi nancial year and its share of post-acquisition movements in reserves, recognised in reserves. The cumulative postacquisition
movement in reserves are adjusted against the carrying amount of the investment. The Group’s investments in
associated companies are carried in the balance sheet at an amount that refl ects its share of the net assets of the associated
companies. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any
other unsecured receivables, the Group’s interest is reduced to nil and recognition of further losses is discontinued except to
the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.
Unrealised gains on transactions between the Group and its associated companies are eliminated to the extent of the
Group’s interest in the associated companies; unrealised losses are also eliminated unless the transaction provides evidence
of impairment of the asset transferred. Where necessary, in applying the equity method, adjustments are made to the
fi nancial statements of associated companies to ensure consistency of accounting policies with those of the Group.
Dilution gains and losses in associates are recognised in income statement.
For incremental interest in associated company, the date of acquisition is the date at which signifi cant infl uence is obtained.
Goodwill is calculated at each purchase date based on the fair value of assets and liabilities identifi ed. The previously
acquires stake is stepped up to fair value and the share of profi ts and equity movements for the previously acquired stake
are not recognised since they are embedded in the step-up.
(d)
Property, plant and equipment
Property, plant and equipment are initially stated at cost or valuation. Costs include expenditure that is directly attributed to
the acquisition of the asset. Land and buildings are shown at fair value, based on periodic, but at least triennial, valuation
by external independent valuers, less subsequent depreciation and impairment losses. The Group and Company may
perform additional valuations during the intervening periods where market conditions indicate that the carrying value of
the revalued assets are materially higher than the market value.
85

Notes To The Financial Statements
- 31 December 2006 (continued)
2 SIGNIFICANT ACCOUNTING POLICIES (continued)
(d)
Property, plant and equipment (continued)
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the assets, and
the net amount is restated to the revalued amount of the asset. All other property, plant and equipment are stated at cost
less depreciation and impairment loss.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefi ts associated with the item will fl ow to the Group and the cost of the item can
be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are
charged to the income statement and/or revenue accounts during the fi nancial period in which they are incurred.
Surplus arising on revaluation are credited to revaluation reserve. Any defi cit arising from the revaluation is charged against
the revaluation reserve to the extent of a previous surplus held in the revaluation reserve for the same asset. In all other cases,
a decrease in the carrying amount is charged to income statement and/or revenue accounts.
Freehold land is not depreciated as it has an infi nite life. Other property, plant and equipment are depreciated on a straight
line basis to write off the cost of the assets, or their revalued amounts, to their residual values over their estimated useful lives.
The annual depreciation rates are as follows:
Freehold buildings 2%
Leasehold buildings
Over the remaining leasehold period or 2%, whichever is lower
Plant and machinery 10% - 20%
Furniture, fi ttings and equipment 10% - 50%
Motor vehicles 20%
Renovation 10% - 20%
The assets’ residual values and useful lives are reviewed at each balance sheet date and adjusted, if appropriate.
At each balance sheet date, the Group assesses whether there is any indication of impairment. If such indications exist, an
analysis is performed to assess whether the carrying amount of the asset is fully recoverable. A write down is made if the
carrying amount exceeds the recoverable amount. See accounting policy note 2(g) on impairment of assets.
Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are credited or charged
to the income statements and/or revenue accounts. On disposal of revalued assets, amounts in revaluation reserve relating
to those assets are transferred to retained earnings and/or life policyholders’ fund.
(e)
Investment properties
Investment properties, comprising of principally land and buildings, are held for long term rental yields or for capital
appreciation or both, and are not occupied by the Group.
Investment properties are carried at fair value. Fair value is based on active market prices, adjusted if necessary, for any
difference in the nature, location or condition of the specifi c asset. If this information is not available, the Group uses
alternative valuation methods such as recent prices on less active markets or discounted cash fl ow projections. These
valuations are reviewed by an independent valuation expert.
Changes in fair values are recorded in the income statement and/or revenue accounts as part of other income.
Property located on land that is held under an operating lease is classifi ed as investment property as long as it is held for long
term yields and is not occupied by the Group. The initial cost of the property is the lower of the fair value of the property and
the present value of the maximum lease payments. The property is carried at fair value after initial recognition.
On disposal of an investment property or when it is permanently withdrawn from use and no future economic benefi ts
are expected from its disposal, it shall be derecognised (eliminated from the balance sheet). The difference between net
proceed and the carrying amount is recognised in the income statement and/or revenue accounts in the fi nancial year of
the retirement or disposal.
If an investment property becomes owner-occupied, it is reclassifi ed as property, plant and equipment, and its fair value at
the date of reclassifi cation becomes its cost for subsequent accounting purposes.
If an item of property, plant and equipment becomes an investment property because its use has changed, any difference
arising between the carrying amount and the fair value of this item at the date of transfer is recognised in equity and/or
revaluation reserve of the insurance funds as a revaluation of property, plant and equipment. However, if a fair value gains
reverses a previous impairment loss, the gain is recognised in the income statement and/or revenue accounts. Upon the
disposal of such investment property, any surplus previously recorded in equity and/or revaluation reserve of the insurance
funds is transferred to the retained earnings and/or life policyholders’ fund.
86

Notes To The Financial Statements
- 31 December 2006 (continued)
2 SIGNIFICANT ACCOUNTING POLICIES (continued)
(f)
Financial assets
The Group classifi es its fi nancial assets into the following categories: fi nancial assets measured at fair value through profi t or
loss, loans and receivables, held-to-maturity fi nancial assets and available-for-sale fi nancial assets. The classifi cation depends
on the purpose for which the investments were acquired. Management determines the classifi cation of its investments at
initial recognition and re-evaluates this at every reporting date.
(i)
Financial assets measured at fair value through profit or loss
The Group classifi es investments acquired for the purpose of selling in the short-term as held for trading. Derivaties
are also classifi ed as held for trading unless they are designated as hedge.
(ii)
Loans and receivables
Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted
in an active market other than those that the Group intends to sell in the short term or that it has designated as at
fair value through profi t or loss or available-for-sale.
(iii)
Held to maturity financial assets
Held to maturity fi nancial assets are non-derivative fi nancial assets with fi xed or determinable payments and fi xed
maturities – other than those that meet the defi nition of loans and receivables – that the Group’s management has
the positive intention and ability to hold to maturity.
(iv)
Available-for-sale financial assets
Available-for-sale fi nancial assets are non-derivative fi nancial assets that are either designated in this category or
not classifi ed in any of the other categories.
Valuation principles
Financial assets are initially measured at fair value plus transaction costs except for investments held for trading, which are
recognised at fair value.
For investments held for trading, gains and losses arising from changes in fair value are included in the income statement
and/or revenue accounts.
For available-for sale investments, gains and losses arising from changes in fair value are recognised in equity until the
investment is disposed off or is determined to be impaired, at which time the cumulative gain or loss previously recognised
in equity is included in the income statement and/or revenue accounts.
The fair values of quoted investments are based on current bid prices. If the market for a fi nancial asset is not active,
the Group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions,
reference to other instruments that are substantially the same, discounted cash fl ow analysis and option pricing models.
Investment in subsidiary and associated companies are stated at cost less accumulated impairment losses. Where an
indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its
recoverable amount. See accounting policy note 2(g) on impairment of assets.
(g)
Impairment of assets
(i)
Financial assets carried at amortised cost
The Group assesses at each balance sheet date whether there is objective evidence that a fi nancial asset or group
of fi nancial assets is impaired. A fi nancial asset or group of fi nancial assets is impaired and impairment losses are
incurred only if there is objective evidence of impairment as a result of one or more events that have occurred after
the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated
future cash fl ows of the fi nancial asset or group of fi nancial assets that can be reliably estimated.
The Group fi rst assesses whether objective evidence of impairment exists individually for fi nancial assets that are
individually signifi cant. If the Group determines that no objective evidence of impairment exists for an individually
assessed fi nancial asset, whether signifi cant or not, it includes the asset in a group of fi nancial assets with similar
credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for
impairment and for which an impairment loss is or continues to be recognised are not included in a collective
assessment of impairment.
87

Notes To The Financial Statements
- 31 December 2006 (continued)
2 SIGNIFICANT ACCOUNTING POLICIES (continued)
(g)
Impairment of assets (continued)
(i)
Financial assets carried at amortised cost (continued)
If there is objective evidence that an impairment loss has been incurred on loans and receivables or held-to-maturity
investments carried at amortised cost, the amount of the loss is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash fl ows (excluding future credit losses that have
been incurred) discounted at the fi nancial asset’s original effective interest rate. The carrying amount of the asset
is reduced through the use of an allowance account and the amount of the loss is recognised in the income
statements and/or revenue accounts. If a held-to-maturity investment or a loan has a variable interest rate, the
discount rate for measuring any impairment loss is the current effective interest rate determined under contract.
For the purpose of a collective evaluation of impairment, fi nancial assets are grouped on the basis of similar credit
risk characteristics. Those characteristics are relevant to the estimation of future cash fl ows for groups of such assets
by being indicative of the issuer’s ability to pay all amounts due under the contractual terms of the debt instrument
being evaluated.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised (such as improved credit rating), the previously recognised
impairment loss is reversed by adjusting the allowance account. The amount of the reversal is recognised in the
income statements and/or revenue accounts.
(ii)
Financial assets carried at fair value
The Group assesses at each balance sheet date whether there is objective evidence that an available-for-sale
fi nancial asset is impaired, including in the case of equity investments classifi ed as available for sale, a signifi cant or
prolonged decline in the fair value of the security below its cost. If any such evidence exists for available-for-sale
fi nancial assets, the cumulative loss – measured as the difference between the acquisition cost and current fair
value, less any impairment loss on the fi nancial asset previously recognised in profi t or loss – is removed from equity
and recognised in the income statements and/or revenue accounts. Impairment losses recognised in the income
statements and/or revenue accounts on equity instruments are not subsequently reversed. The impairment loss is
reversed through the income statements and/or revenue accounts, if in a subsequent period the fair value of a
debt instrument classifi ed as available for sale increases and the increase can be objectively related to an event
occurring after the impairment loss was recognised in profi t or loss.
(iii)
Impairment of other non-financial assets
Assets that have an indefi nite useful life are not subject to amortisation and are tested annually for impairment.
Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an
asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifi able cash fl ows (cash-generating units).
(h)
Derivative instruments
Derivative instruments, comprising mainly Kuala Lumpur Composite Index (“KLCI”) futures, are initially recognised in the
balance sheet at fair value and are subsequently remeasured at their fair values.
The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument,
and if so, the nature of the item being hedged. As the Group’s derivative instruments do not qualify for hedge accounting,
changes in the fair value of all such derivative instruments are recognised immediately in the income statements and/or
revenue accounts.
(i)
Loans and receivables
Loans and receivables, except for those relating to insurance contracts, are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of
loans and receivables is established when there is objective evidence that the Group will not be able to collect all amounts
due according to the original terms of receivables. The amount of the provision is the difference between the assets’
carrying amount and the present value of estimated future cash fl ows discounted at the effective interest rate. The amount
of the provision is recognised in the income statement.
(j)
Insurance receivables
For the insurance subsidiary companies with insurance receivables, known bad debts are written-off and specifi c allowances
are made for any premiums including agents balances or reinsurance balances which remain outstanding for more than
six months from the date on which they become receivable except for motor premiums for which allowance is made for
amount outstanding for more than 30 days, and for all debts which are considered doubtful.
88

Notes To The Financial Statements
- 31 December 2006 (continued)
2 SIGNIFICANT ACCOUNTING POLICIES (continued)
(k)
Intangible assets
(i)
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net
identifi able assets of the acquired subsidiary/associate at the acquisition date. Goodwill on acquisition of subsidiaries
made on or after 1 January 2005, is included in intangible assets.
Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment
losses on goodwill are not reversed. All goodwill is allocated to cash generating units for the purpose of impairment
testing.
(ii)
Management rights
This represents the purchase consideration to acquire the rights to manage unit trust funds. The purchase consideration
on the acquired right is capitalised and amortised over a period of 20 years, the period in which the Group expects
to recognise the related revenue.
(iii)
Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use
the specifi c software. These costs are amortised over their estimated useful lives.
Costs associated with maintaining computer software programmes are recognised as an expense when incurred.
Cost that are directly associated with identifi able software systems controlled by the Company, which do not form
an integral part of the hardware, and that will probably generate economic benefi ts exceeding costs beyond one
year, are recognised as intangible assets.
Computer software development costs recognised as assets are amortised using straight line method over their
estimated useful lives, ranging between 5 to 10 years.
(l)
Employee benefits
Short-term employee benefits
Wages, salaries, paid annual leave, bonuses and non-monetary benefi ts, which are short-term employee benefi ts, are
accrued in the fi nancial year in which the associated services are rendered by employees of the Group and Company.
Post employment benefits
The Group and Company has post-employment benefi t schemes for eligible employees, which are defi ned contribution
plans.
A defi ned contribution plan is a pension plan under which the Group and Company pay fi xed contributions or variable
contributions as determined yearly, into a separate entity (“a fund”), and will have no legal or constructive obligations to
pay further contributions if the fund does not hold suffi cient assets to pay all employee benefi ts relating to employee service
in the current and prior fi nancial years.
The Group’s and Company’s contributions to defi ned contribution plans, including the Employees’ Provident Fund,
are charged to the income statements and/or revenue accounts in the fi nancial year to which they relate. Once the
contributions have been paid, the Group and Company have no further payment obligations.
(m)
Provision for life agents’ retirement benefits
An insurance subsidiary company of the Group operates a retirement benefi ts scheme for its eligible life agents, calculated
in accordance with the terms and conditions as per respective Agent Retirement Plan Arrangement with the insurance
subsidiary company.
The retirement benefi ts earned by the eligible life agents on and subsequent to year 2001 were funded through investments
in an investment-linked business managed by the insurance subsidiary company.
The retirement benefi ts earned by the eligible life agents who opted to remain in the scheme prior to year 2001 were
unfunded and have been recorded as provision for life agents’ retirement benefi ts.
In accordance with the requirements of the FRS 119 - Employee Benefi ts, the scheme is treated as a funded defi ned benefi t
scheme or an unfunded defi ned benefi t scheme as appropriate.
89

Notes To The Financial Statements
- 31 December 2006 (continued)
2 SIGNIFICANT ACCOUNTING POLICIES (continued)
(n)
General insurance underwriting results
The general insurance underwriting results are determined for each class of business after taking into account reinsurances,
commissions, unearned premiums and claims incurred.
Premium income
Premium income is recognised in a fi nancial year in respect of risks assumed during that particular year. Premiums from
direct business are recognised during the fi nancial year upon the issuance of insurance policies. Premiums in respect of risks
incepted for which insurance policies have not been raised as of the balance sheet date are accrued at that date.
Inward treaty reinsurance premiums are recognised on the basis of periodic advices received from ceding insurers.
Outward reinsurance premiums are recognised in the same accounting period as the original policy to which the reinsurance
relates.
Unearned premium reserves
Unearned premium reserves (“UPR”) represent the portion of the net premiums of insurance policies written that relate to the
unexpired periods of the policies at the end of the fi nancial year.
In determining the UPR at the balance sheet date, the method that most accurately refl ects the actual unearned premium
is used, as follows:
- 25% method for marine cargo, aviation cargo and transit; and
- 1/24th method for all other classes of Malaysian general policies reduced by the percentage of accounted gross
direct business commissions to the corresponding premiums.
- time apportionment method for policies with insurance periods other than 12 months
Provision for claims
A liability for outstanding claims is recognised in respect of both direct insurance and inward reinsurance. The amount of
outstanding claims is the best estimate of the expenditure required together with related expenses less recoveries to settle
the present obligation at the balance sheet date.
Provision is also made for the cost of claims, together with related expenses, incurred but not reported (“IBNR”) at the
balance sheet date, based on an actuarial valuation by an independent qualifi ed actuary.
Acquisition costs
The cost of acquiring and renewing insurance policies, net of income derived from ceding reinsurance premiums, is
recognised as incurred and properly allocated to the periods in which it is probable they give rise to income.
(o)
Life insurance underwriting results
The surplus transferable from the life fund to the income statement is based on the surplus determined by an annual actuarial
valuation of the long term liabilities to policyholders.
Premium income
Premium income includes premium recognised in the life fund and the investment-linked fund.
Premium income of the life fund is recognised as soon as the amount of the premium can be reliably measured. First
premium is recognised from inception date and subsequent premium is recognised when it is due.
At the end of the fi nancial year, all due premiums are accounted for to the extent that they can be reliably measured.
Outward reinsurance premiums are recognised in the same accounting period as the original policies to which the
reinsurance relates.
Premium income of the investment-linked fund includes net creation of units which represents premiums paid by policyholders
as payment for a new contract or subsequent payments to increase the amount of that contract. Net creation of units is
recognised on a receipt basis.
Commission and agency expenses
Commission and agency expenses, which are costs directly incurred in securing premium on insurance policies, net of
income derived from reinsurers in the course of ceding of premium to reinsurers, are charged to the revenue account in the
fi nancial year in which they are incurred.
90

Notes To The Financial Statements
- 31 December 2006 (continued)
2 SIGNIFICANT ACCOUNTING POLICIES (continued)
(o)
Life insurance underwriting results (continued)
Provision for claims
Claims and settlement costs that are incurred during the fi nancial year are recognised when a claimable event occurs
and/or the insurer is notifi ed.
Recoveries on reinsurance claims are accounted for in the same fi nancial year as the original claims are recognised.
Claims and provisions for claims arising on life insurance policies including settlement costs, less reinsurance recoveries, are
accounted for using the case basis method and for this purpose, the benefi ts payable under a life insurance policy are
recognised as follows:
(a)
(b)
maturity or other policy benefi t payments due on specifi ed dates are treated as claims payable on the due dates;
death, surrender and other benefi ts without due dates are treated as claims payable, on the date of receipt of
intimation of death of the assured or occurrence of contingency covered.
(p)
Other revenue recognition
Interest income for fi nancial assets that are not classifi ed as fair value through profi t or loss is recognised using the effective
interest method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being
the estimated future cash fl ow discounted at the original effective interest rate of the investment and continues unwinding
the discount as interest income.
Other interest income including the amount of amortisation of premiums and accretion of discounts, is recognised on a time
proportion basis that takes into account the effective yield of the asset.
Rental income is recognised on an accrual basis except where default in payment of rent has already occurred and
rent due remains outstanding for over six months, in which case recognition of rental income is suspended. Subsequent to
suspension, income is recognised on the receipt basis until all arrears have been paid.
Lease rental income net of payment of lease rental expenses made under operating lease of the same properties is
recognised on the straight line basis over the lease term.
Dividend income is recognised when the right to receive payment is established.
Management, investment advisory, security and consultancy services fees are recognised when the services are provided.
(q)
Foreign currencies
(i)
Functional and presentation currency
Items included in the fi nancial statements of each of the Group’s entities as measured using the currency of the
primary economic movement in which the entity operates (‘functional currency’)
The consolidated fi nancial statements are presented in Ringgit Malaysia which is the Group’s functional and
presentational currency.
(ii)
Transactions and balances
Translation differences on non-monetary items, such as equities held at fair value through profi t or loss are reported
as part of the fair value gain or loss. Translation differences on non-monetary items such as equities classifi ed as
available-for-sale fi nancial statements, are included in the fair value reserve.
Foreign currency transactions in the Group are accounted for at exchange rates prevailing at the transaction dates.
Foreign currency monetary assets and liabilities are translated at exchange rates prevailing at the balance sheet
date. Exchange differences arising from the settlement of foreign currency transactions and from the translation of
foreign currency monetary assets and liabilities are included in the income statements and/or revenue accounts.
(iii)
Group companies
The results and fi nancial position of all the group entities (none of which has the currency of a hyperinfl ationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that
balance sheet;
91

Notes To The Financial Statements
- 31 December 2006 (continued)
2 SIGNIFICANT ACCOUNTING POLICIES (continued)
(q)
Foreign currencies (continued)
(iii)
Group companies (continued)
• income and expenses for each income statement are translated at average exchange rates (unless this
average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated at the rate on the dates of the transactions);
and
• all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations are
taken to shareholders’ equity. When a foreign operation is partially disposed off or sold, exchange differences that
were recorded in equity are recognised in the income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities
of the foreign entity and translated at the closing rate. This will be applied prospectively.
(r)
Income taxes
Current tax expense is determined according to the tax laws of the jurisdictions in which the Group operates and includes
all taxes based upon the taxable profi ts.
Deferred tax is recognised in full, using the liability method, on temporary differences arising between the amounts attributed
to assets and liabilities for tax purpose and their carrying amounts in the fi nancial statements. However, deferred tax is not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting nor taxable profi t or loss.
Deferred tax assets are recognised to the extent that it is probable that taxable profi ts will be available against which the
deductible temporary differences or unused tax losses can be utilised.
Deferred tax is recognised on temporary differences arising on investments in subsidiary and associated companies expect
where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax is determined using tax rates (and tax laws) that have been enacted or substantially enacted by the balance
sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
(s)
Finance leases - lessor
When assets are leased out under a fi nance lease, the present value of the lease payments is recognised as a receivable.
The difference between the gross receivable and the present value of the receivable is recognised as unearned fi nance
income. Lease income is recognised over the term of the lease using the sum of digits method.
(t)
Operating leases
Leases in which a signifi cant risks and rewards are retained by the lessor are classifi ed as operating leases. Payments made
under operating leases (net of any incentive received from the lessor) are charged to the income statement and/or revenue
accounts on a straight line basis over the period of the lease.
(u)
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at
amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in
the income statements over the period of the borrowings using the effective interest method.
(v)
Dividends
Dividends are recognised as liabilities when the obligation to pay is established.
(w)
Contingent liabilities and contingent assets
The Group does not recognise a contingent liability but discloses its existence in the fi nancial statements. A contingent
liability is a possible obligation that arises from past events whose existence will be confi rmed by uncertain future events
beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outfl ow of
resources will be required to settle the obligation. A contingent liability also arises in the extremely rare case where there is
a liability that cannot be recognised because it cannot be measured reliably.
92
A contingent asset is a possible asset that arises from past events whose existence will be confi rmed by uncertain future
events beyond the control of the Group. The Group does not recognise contingent assets but discloses its existence where
infl ows of economic benefi ts are probable, but not virtually certain.

Notes To The Financial Statements
- 31 December 2006 (continued)
2 SIGNIFICANT ACCOUNTING POLICIES (continued)
(x)
Provisions
Provisions are recognised when the Group has a present legal constructive obligation as a result of past events, when it is
probable that an outfl ow of resources will be required to settle the obligation, and when a reliable estimate of the amount
can be made.
(y)
Cash and cash equivalents
Cash and cash equivalents consist of cash and bank balances less bank overdrafts, excluding fi xed and call deposits.
(z)
Financial instruments
Description
A fi nancial instrument is any contract that gives rise to both a fi nancial asset of one entity and a fi nancial liability or equity
instrument of another enterprise.
A fi nancial asset is any asset that is cash, a contractual right to receive cash or another fi nancial asset from another
enterprise, a contractual right to exchange fi nancial instruments with another enterprise under conditions that are potentially
favourable, or an equity instrument of another enterprise.
A fi nancial liability is any liability that is a contractual obligation to deliver cash or another fi nancial asset to another enterprise,
or to exchange fi nancial instruments with another enterprise under conditions that are potentially unfavourable.
The particular recognition method adopted for fi nancial instruments recognised on the balance sheet is disclosed in the
individual accounting policy note associated with each item.
(aa)
Segment reporting
Segment reporting is presented for enhanced assessment of the Group’s risks and returns. Business segments provide products
or services that are subject to risk and returns that are different from those of other business segments. Geographical
segments provide products or services within a particular economic environment that is subject to risks and returns that are
different from those components operating in other economic environments.
Segment revenue, expense, assets and liabilities are those amounts resulting from the operating activities of a segment
that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the
segment. Segment revenue, expense, assets and liabilities are determined before intragroup balances and intragroup
transactions are eliminated as part of the consolidation process, except to the extent that such intragroup balances and
transactions are between group enterprises within a single segment.
(ab)
Assets acquired under hire purchase agreement
Assets fi nanced by hire purchase agreements which transfer substantially all the risks and rewards of ownership to the Group
are capitalised as property, plant and equipment and the corresponding obligations are treated as liabilities. The property,
plant and equipment capitalised are depreciated on the same basis as owned assets. Finance charges are allocated to
the income statements over the period of the agreements to give a constant periodic rate of charge on the remaining hire
purchase liabilities.
3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES
Estimates and judgments are continually evaluated by the Directors and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
(a)
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by defi nition,
rarely equal the related actual results. The estimates and assumptions that have a signifi cant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next fi nancial year are outlined below.
(i)
Pipeline premiums
The estimation of pipeline premiums, i.e. premiums incepted for which the policies have not been issued is based on
the actual pipeline premiums in prior years adjusted for recent trend and events.
93

Notes To The Financial Statements
- 31 December 2006 (continued)
3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES (continued)
(a)
Critical accounting estimates and assumptions (continued)
(ii)
Incurred but not reported (‘IBNR’) claims
The estimation of the ultimate liability arising from claims made under insurance contract is one of the Group’s most
critical accounting estimate.
There are several sources of uncertainty that need to be considered in the estimate of these obligations that the
Group will ultimately pay for such claims. In particular, the outcome of future events such as the size of court awards,
the attitudes of claimants towards settlement of their claims, and social and economic infl ation. Due to the inherent
uncertainty in any estimate of those obligations, it is certain that actual future losses and loss adjustment expenses
will not develop exactly as projected and may, in fact, vary signifi cantly from the projections. IBNR reserves are
hence estimated by reference to a variety of estimation techniques, generally based on a statistical analysis of
historical experience which assumes an underlying pattern of claims development and payment. The fi nal selected
estimates are based on a judgemental consideration of results of each method and qualitative information, such as
those mentioned above. Projections are based on historical experience and external benchmarks where relevant. It
is thus, impracticable to disclose the extent of the possible effects of potential changes to the key assumptions used
in assessing the IBNR reserves due to the number of variables included in the assessment.
In addition, a confi dence level, which is the estimated probability that a given ringgit amount will be able to cover
a specifi c group of open or unreported claims, is applied in estimating the IBNR reserves. The IBNR reserve estimation
is performed by an independent external actuary. In the current fi nancial year, the insurance subsidiary company
of the Group raised its IBNR claims reserve from 50% confi dence level to 65% confi dence level. This has resulted in an
increase of RM3,470,000 in the net claims incurred for the current fi nancial year.
(iii)
Liabilities of life insurance business
For life insurance contracts, estimates are made for future deaths, disabilities, voluntary terminations, investment
returns and administration expenses. The Company’s estimation is based on expected number of deaths on standard
industry and national mortality tables that refl ect historical mortality experience, adjusted where appropriate to
refl ect the Company’s unique risk exposure. Provision for future administrative expenses are implicitly allowed for in
the conservatism of the estimates for future deaths, disabilities and investment returns.
The actuarial liabilities as at December 31, 2006 were calculated in accordance with the reserving requirements
stated in the Insurance Act 1996 whereby the assumptions on interest and mortality assumptions are prescribed.
For those contracts where the provisions for liabilities are not explicitly prescribed under the Insurance Act 1996, the
Appointed Actuary shall set aside such liabilities on an appropriate basis which is disclosed in a valuation report to
Bank Negara Malaysia.
In the event that the regulators change the said assumptions, with all other things being equal, then a reduction in
the interest assumption will increase the computed actuarial liabilities. Conversely, an increase (i.e. deterioration) in
the mortality assumption would (for most type of plans) increase the computed actuarial liabilities.Due to the inherent
risk of uncertainty in any estimate of those obligations, the future provisions for liabilities may vary signifi cantly from
the estimations. At such reporting date, these estimates are reassessed for adequacy and changes will be refl ected
as adjustments to the liability. In addition to the expected outcome, solvency margins prescribed by regulations are
included in these key estimates.
It is thus impractical to disclose the extent of the possible effects of potential changes to the key assumptions used
in assessing the liabilities of life insurance business due to the number of variables included in the assessment.
(iv)
Impairment allowance on loans and receivables
It is the Group’s policy to establish impairment allowance in respect of estimated and inherent credit losses in its
loans and receivables portfolio.
In determining impairment allowance, management considers objective evidence of impairment as a result of one
or more events that have occurred after the initial recognition. A provision for impairment of loan is established
when there is objective evidence that the Group will not be able to collect all amounts due according to the original
term of receivables. The amount of provision is the difference between the loan’s carrying amount and the present
value of estimated future cash fl ow discounted at the original effective interest rate. The amount of specifi c provision
also takes into account the collateral value and recoverable amount of interest due, which may be discounted
to refl ect the impact of recovery process. The recovery process is estimated to be between one to three years,
depending on default condition of the loan and type of collateral.
94

Notes To The Financial Statements
- 31 December 2006 (continued)
3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES (continued)
(a)
Critical accounting estimates and assumptions (continued)
(iv)
Impairment allowance on loans and receivables (continued)
Where the collateral is property, the net realisable value for the property is determined by using its fair value which
is based on open market value by independent property valuers, adjusted if necessary, for any difference in the
nature, location or condition of the specifi c asset, while share is based on last transacted price. If this information is
not available, the Group uses alternative valuation methods such as recent prices on less active markets, adjusted
if necessary, for any difference in the nature, location or condition of the specifi c asset. The sensitivity anaylsis is
described in note 8 to the fi nancial statements.
Included in the loans portfolio are loans amounting to approximately RM44,710,000, where there are disputes on
the pledged collaterals. The Directors of the Group have assessed the recoverability of those loans, based on legal
representation, and conclude that no allowance for doubtful debts is required on those loans.
(v)
Fair values of investment properties
Fair value of investment properties are valued at open market value by independent property valuers, adjusted
if necessary, for any difference in the nature, location or condition of the specifi c asset. If this information is not
available, the Group uses alternative valuation methods such as recent prices on less active markets adjusted
if necessary, for any difference in the nature, location or condition of the specifi c asset or discounted cash fl ow
projections. Investment properties which the Group intends to dispose within the next twenty-four months from
the balance sheet date are valued based on the expected rental yields i.e. lettable fl oor areas multiply by an
appropriate capitalisation rate. The Group expected rental yield is 6.5% per annum. Should those properties be
capitalised at the market expected rental yield of 7.5% per annum, the adjusted market values of those properties
would differ by approximately RM16,000,000.
(vi)
Fair value of financial instruments
Fair value is defi ned as the value at which positions can be closed or sold in a transaction with a willing and
knowledgeable counterparty over a time period that is consistent with the Groups’ trading or investments strategy.
The majority of the Group’s fi nancial instrucments reported at fair value are based on quoted and observable
market prices for quoted investments; for unquoted investments where possible using discounted cash fl ow analysis
or by computing the average of two or more prices quoted by the intermediate or brokers or fi nancial institutions;
for investment properties at market prices by independent valuation experts.
Management exercise judgement in determining the risk characteristics of various fi nancial instruments, discount
rates, estimates of future cash fl ows and other factors used in valuation process. Also, judgement may be applied in
estimating prices for less readily observable external parameters.
(vii)
Impairment review of available-for-sale and held-to-maturity financial assets
The Group performs an impairment review when changes in circumstances indicate that the carrying amounts of
available-for-sale and held-to-maturity fi nancial assets may not be recoverable. The recoverable amount represents
the current fair value or present value of the estimated future cash fl ows discounted at the original effective interest
rate expected to arise from the affected fi nancial assets. In arriving at the current fair value or estimated future cash
fl ows, management exercise judgement in estimating the collectible or realisable amounts including extent of credit
loss.
(b)
Critical judgment in applying the entity’s accounting policies
In determining and applying accounting policies, judgment is often required in respect of items where the choice of specifi c
policy could materially affect the reported results and fi nancial position of the Group. The following accounting policy
requires subjective judgement, often as a result of the need to make estimates about the effect of the matters that are
inherently uncertain.
Investment property classification
In the previous fi nancial year, the Group had classifi ed all properties as investment properties as the Group was unable to
separately identify the value of those relating to the generating of investment income and those held for administrative
purposes. The Group has subsequently reassessed their judgements and assumptions over the identifi cation of investment
properties during the current fi nancial year. The assessment included the identifi cation of the portion of the property held
for administrative purpose, the signifi cance of that portion and whether the property could be sold or leased as a fi nance
lease, separately, resulting in certain properties reclassifi ed to property, plant and equipment.
95

Notes To The Financial Statements
- 31 December 2006 (continued)
4 PROPERTY, PLANT AND EQUIPMENT
(a) GENERAL AND SHAREHOLDERS’ FUNDS
GROUP
Net book value
Furniture,
Assets
Freehold Freehold Plant and fitting and Motor under
Note land buildings machinery equipment vehicles Renovation construction Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2006
- as previously stated - - 161 8,048 6,970 3,579 4,027 22,785
- reclassifi ed from
investment
properties 6(a), 43 14,544 60,231 - - - - - 74,775
- as restated 14,544 60,231 161 8,048 6,970 3,579 4,027 97,560
Reclassifi ed to
intangible assets 5(a) - - - (1,274) - - - (1,274)
Additions at cost - - 3 1,646 2,987 1,319 2,684 8,639
Disposals at
net book value - - - (1) (511) (90) - (602)
Write off at
net book value - - - (6) - (1) - (7)
Impairment loss - (382) - - - - - (382)
Currency translation
difference - - - (32) (27) (7) (175) (241)
Depreciation charge
for the fi nancial year - (1,369) (11) (2,357) (1,407) (971) - (6,115)
At 31 December 2006 14,544 58,480 153 6,024 8,012 3,829 6,536 97,578
At 1 January 2005
- as previously stated - - 155 9,249 8,362 3,614 1,772 23,152
- reclassifi ed from
investment properties 6(a), 43 14,544 60,231 - - - - 74,775
- as restated 14,544 60,231 155 9,249 8,362 3,614 1,772 97,927
Additions at cost - - 16 3,430 1,778 753 2,255 8,232
Revaluation surplus
and reversal of
depreciation due
to revaluation - 1,204 - - - - - 1,204
Disposals at
net book value - - - (29) (1,363) - - (1,392)
Write off at
net book value - - - (339) (94) - - (433)
Depreciation charge
for the fi nancial year - (1,204) (10) (4,263) (1,713) (788) - (7,978)
At 31 December 2005 14,544 60,231 161 8,048 6,970 3,579 4,027 97,560
96

Notes To The Financial Statements
- 31 December 2006 (continued)
4 PROPERTY, PLANT AND EQUIPMENT (continued)
(a) GENERAL AND SHAREHOLDERS’ FUNDS (continued)
GROUP
At 31 December 2006
Furniture,
Assets
Freehold Freehold Plant and fitting and Motor under
land buildings machinery equipment vehicles Renovation construction Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost - - 178 30,232 15,841 10,683 6,536 63,470
Valuation 14,544 59,849 - - - - - 74,393
Accumulated impairment losses - - - (65) - - - (65)
Accumulated depreciation - (1,369) (25) (24,143) (7,829) (6,854) - (40,220)
Net book value 14,544 58,480 153 6,024 8,012 3,829 6,536 97,578
At 31 December 2005
Cost - - 498 31,300 13,722 9,391 4,027 58,938
Valuation 14,544 60,231 - - - - - 74,775
Accumulated impairment losses - - - (65) - - - (65)
Accumulated depreciation - - (337) (23,187) (6,752) (5,812) - (36,088)
Net book value 14,544 60,231 161 8,048 6,970 3,579 4,027 97,560
The net book value of assets acquired under hire purchase agreements was RM2,518,000 (2005: RM558,000).
97

Notes To The Financial Statements
- 31 December 2006 (continued)
4 PROPERTY, PLANT AND EQUIPMENT (continued)
(a) GENERAL AND SHAREHOLDERS’ FUNDS (continued)
Furniture,
fittings and Motor
equipment vehicles Renovation Total
RM’000 RM’000 RM’000 RM’000
COMPANY
Net book value
At 1 January 2006 248 1,735 46 2,029
Additions at cost 75 1,284 2 1,361
Disposals at net book value - (108) - (108)
Write off at net book value (6) - - (6)
Depreciation charge for the fi nancial year (48) (396) (7) (451)
At 31 December 2006 269 2,515 41 2,825
At 31 December 2006
Cost 561 3,960 66 4,587
Accumulated depreciation (292) (1,445) (25) (1,762)
Net book value 269 2,515 41 2,825
At 1 January 2005 304 1,924 40 2,268
Additions at cost 83 329 12 424
Disposals at net book value - (210) - (210)
Depreciation charge for the fi nancial year (139) (308) (6) (453)
At 31 December 2005 248 1,735 46 2,029
At 31 December 2005
Cost 498 2,842 64 3,404
Accumulated depreciation (250) (1,107) (18) (1,375)
Net book value 248 1,735 46 2,029
The net book value of assets acquired under hire purchase agreements was RM1,141,000 (2005: Nil).
98

Notes To The Financial Statements
- 31 December 2006 (continued)
4 PROPERTY, PLANT AND EQUIPMENT (continued)
(b) LIFE FUND
GROUP
Net book value
Furniture,
Freehold Freehold Leasehold fitting and Motor
Note land buildings buildings equipment vehicles Renovation Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2006
- as previously stated - - - 13,806 3,518 14,781 32,105
- reclassifi ed from investment
properties 6(b), 43 45,164 170,214 16,710 - - - 232,088
- as restated 45,164 170,214 16,710 13,806 3,518 14,781 264,193
Reclassifi ed to intangible assets 5(b) - - - (1,763) - - (1,763)
Additions at cost - 415 - 2,117 885 3,871 7,288
Reclassifi cation from investment
properties, at net book value 6(b) - 43,811 - - - - 43,811
Disposals at net book value - - - (39) (48) (43) (130)
Impairment loss - (17,890) - - - - (17,890)
Depreciation charge
for the fi nancial year - (4,651) (442) (4,387) (723) (4,037) (14,240)
At 31 December 2006 45,164 191,899 16,268 9,734 3,632 14,572 281,269
At 1 January 2005
- as previously stated - - - 16,191 3,710 17,202 37,103
- reclassifi ed from investment
properties 6(b), 43 45,164 170,310 16,879 - - - 232,353
- as restated 45,164 170,310 16,879 16,191 3,710 17,202 269,456
Additions at cost - - - 2,404 647 920 3,971
Revaluation surplus and
reversal of depreciation
due to revaluation - 3,131 104 - - - 3,235
Disposals at net book value - - - (6) (342) (21) (369)
Depreciation charge
for the fi nancial year - (3,227) (273) (4,783) (497) (3,320) (12,100)
At 31 December 2005 45,164 170,214 16,710 13,806 3,518 14,781 264,193
99

Notes To The Financial Statements
- 31 December 2006 (continued)
4 PROPERTY, PLANT AND EQUIPMENT (continued)
(b) LIFE FUND
GROUP
At 31 December 2006
Furniture,
Freehold Freehold Leasehold fitting and Motor
land buildings buildings equipment vehicles Renovation Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost - - - 56,857 6,859 45,063 108,779
Valuation 45,164 214,815 16,710 - - - 276,689
Accumulated impairment loss - (4,644) - - - - (4,644)
Accumulated depreciation - (18,272) (442) (47,123) (3,227) (30,491) (99,555)
Net book value 45,164 191,899 16,268 9,734 3,632 14,572 281,269
At 31 December 2005
Cost - - - 57,353 6,024 41,264 104,641
Valuation 45,164 170,214 16,710 - - - 232,088
Accumulated depreciation - - - (43,547) (2,506) (26,483) (72,536)
Net book value 45,164 170,214 16,710 13,806 3,518 14,781 264,193
The Directors revalued all freehold land and freehold and long term leasehold buildings of the Group held as property, plant
and equipment as at 31 December 2005. The properties are valued by independent valuation experts where the fair values are
determined by reference to observable prices in an active market or recent market transactions on arm’s length terms, adjusted if
necessary, for any differences in the nature, location or condition of the specifi c asset. The Group recognised a revaluation surplus of
RM1,024,000 and RM3,235,000 for the general insurance and shareholders’ fund and life insurance, respectively for the year ended
31 December 2005. The revaluation surplus net of applicable deferred income taxes was credited to revaluation reserves.
A revaluation was performed during the current fi nancial year on freehold and long term leasehold buildings of the Group held as
property, plant and equipment, which resulted in a net defi cit of RM382,000 for the general and shareholders’ fund and RM17,890,000
for the life fund. Of the amount, RM382,000 and RM879,000 from the general and shareholders’ fund and life fund respectively, were
recognised in the revaluation reserves to the extent of revaluation surpluses available. The remaining balances were debited to the
income statement and/or revenue accounts. . The impairment arose after taking into account the property’s location, occupancy
rate and the Group’s expected capitalisation rate of 6.5%.
Had the freehold land and freehold and long term leasehold buildings been carried at historical cost less accumulated depreciation,
the carrying amounts that would have been included in the fi nancial statements at the end of the year are as follows:
General and
Shareholders’ fund
Life fund
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Freehold land and buildings 67,548 68,752 220,522 180,122
Leasehold buildings - - 13,989 14,262
67,548 68,752 234,511 194,384
The titles to certain properties of the life fund held by an insurance subsidiary company, amounting to RM33,761,000 (2005:
RM3,790,000) are in the process of being transferred to the insurance subsidiary company. Risks, rewards and effective titles to these
properties have been passed to the insurance subsidiary company upon unconditional completion of the acquisition of those
properties. The insurance subsidiary company has submitted the relevant documents to the authorities for transfer of legal titles to
them and is awaiting the process and fi nalisation of these transfers to be completed.
100

Notes To The Financial Statements
- 31 December 2006 (continued)
5 INTANGIBLE ASSETS
(a) GENERAL AND SHAREHOLDERS’ FUNDS
Management Computer
rights software Total
RM’000 RM’000 RM’000
GROUP
Net book value
At 1 January 2006 6,189 - 6,189
Reclassifi ed from property, plant and equipment (note 4(a)) - 1,274 1,274
Additions at cost - 2,784 2,784
Disposal at net book value - (450) (450)
Amortisation charge for the fi nancial year (347) (611) (958)
At 31 December 2006 5,842 2,997 8,839
At 31 December 2006
Cost 7,000 4,887 11,887
Accumulated amortisation (1,158) (1,890) (3,048)
Net book value 5,842 2,997 8,839
At 1 January 2005 6,536 - 6,536
Amortisation charge for the fi nancial year (347) - (347)
At 31 December 2005 6,189 - 6,189
At 31 December 2005
Cost 7,000 - 7,000
Accumulated amortisation (811) - (811)
Net book value 6,189 - 6,189
101

Notes To The Financial Statements
- 31 December 2006 (continued)
5 INTANGIBLE ASSETS (continued)
(b) LIFE FUND
Computer Software
2006 2005
RM’000 RM’000
GROUP
Net book value
At 1 January - -
Reclassifi ed from property, plant and equipment (note 4(b)) 1,763 -
Additions at cost 1,793 -
Amortisation charge for the fi nancial year (871) -
At 31 December 2,685 -
At 31 December
Cost 4,355 -
Accumulated amortisation (1,670) -
Net book value 2,685 -
The intangible assets of the Group consist of computer software and management rights.
Computer Software
Computer software consists mainly of development costs and cost that are directly associated with identifi able software systems
controlled by the Group, that do not form the integral part of the hardware, and that will probably generate economic benefi ts
exceeding costs beyond one year.
Management Rights
Management rights represent the acquired rights to manage unit trust funds (“the Rights”). Pursuant to the Sale of Business
Agreement dated 5 August 2003 between MAAKL Mutual Bhd (“MAAKL”), a 70% owned subsidiary company of MAA
Corporation Sdn Bhd which is in turn a wholly owned subsidiary company of the Company, and MBf Unit Trust Management
Berhad (“MUTMB”), MAAKL acquired the Rights from MUTMB to manage four unit trust funds (“the Funds”) managed by MUTMB.
The Funds are MAAKL Equity Index Fund, MAAKL Value Fund, MAAKL Mutual Balanced Fund and MAAKL Syariah Index Fund. The
effective date of the transfer of the management of the Funds was on 1 December 2003.
The Rights is amortised over a straight line basis, over a period of 20 years (2005: 20 years), the period in which the Group expects
to recognise the related revenue.
102

Notes To The Financial Statements
- 31 December 2006 (continued)
6 INVESTMENT PROPERTIES
(a) GENERAL AND SHAREHOLDERS’ FUNDS
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Balance as at 1 January 130,183 122,099 - -
Adjustments due to:
- effect of adopting FRS 140 - 8,337 - -
- reclassifi ed to property, plant and
equipment (note 4(a), 43) (74,775) (74,775) - -
Balance as at 1 January - restated 55,408 55,661 - -
Additions 1,668 1,391 - -
Disposals (5,356) (1,676) - -
Fair value (loss)/gain (note 27(a),(b)) (3,297) 32 - -
Balance as at 31 December 48,423 55,408 - -
Comprising of:
Freehold land and buildings 29,733 33,350 - -
Leasehold land and buildings 18,690 22,058 - -
48,423 55,408 - -
(b) LIFE FUND
GROUP
2006 2005
RM’000 RM’000
Balance as at 1 January 961,493 875,555
Adjustments due to:
- effect of adopting FRS 140 - 69,005
- prior year adjustment (note 43(c)) (57,500) (57,500)
- reclassifi ed to property, plant and equipment (note 4(b), 43) (231,099) (232,353)
Reclassifi cation to prepaid lease rentals (6,537) -
Balance as at 1 January - restated 666,357 654,707
Reclassifi cation to property, plant and equipment (note 4(b)) (43,811) -
Additions 82,577 74,082
Disposals (169) (56,124)
Fair value (loss)/gain (note 27(c)) (18,440) 229
Balance as at 31 December 686,514 672,894
Comprising of:
Freehold land and buildings 480,312 553,674
Leasehold land and buildings 206,202 119,220
686,514 672,894
The fair value of the properties was estimated at RM41,159,000 and RM243,199,000 for the general insurance and shareholders’
funds and life insurance respectively, based on valuation by an independent professionally qualifi ed valuers. Valuations were
based on current prices in an active market for all properties except for the properties in certain locations which the Group uses
the yield method based on an expected yield of 6.5% per annum and/or recently transacted prices.
The titles to certain investment properties of the general and shareholders’ fund and the life fund of an insurance subsidiary
company, amounting to RM20,700,000 (2005: RM22,507,000) and RM 184,959,000 (2005: RM337,727,000) respectively, are in
the process of being transferred to the insurance subsidiary company. Risks, rewards and effective titles to these investment
properties have been passed to the insurance subsidiary company upon unconditional completion of the acquisition of those
properties. The insurance subsidiary company has submitted the relevant documents to the authorities for transfer of legal titles
to them and is awaiting the process and fi nalisation of these transfers to be completed.
103

Notes To The Financial Statements
- 31 December 2006 (continued)
7 INVESTMENTS
The Group’s fi nancial assets are summarised by measurement category in the following presentation:
(a) GENERAL AND SHAREHOLDERS’ FUNDS
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
At fair value through profi t or loss 86,370 174,609 11,610 10,879
Available-for-sale 181,740 133,120 - -
Held to maturity 21,027 10,714 - -
289,137 318,443 11,610 10,879
The current portion of fi nancial assets is RM77,806,000 (2005: RM39,512,000), the remaining portion being non-current. The assets
included in each of the categories above are detailed in the tables below:
Investments held at fair value through profit or loss
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Equity securities
- Quoted 53,062 131,053 11,610 10,879
- Unquoted 1,696 1,276 - -
54,758 132,329 11,610 10,879
Corporate debt securities
- Quoted 9,344 8,525 - -
- Unquoted 5,113 5,116 - -
14,457 13,641 - -
Unit trusts
- Quoted 271 - - -
- Unquoted 1,247 12,091 - -
1,518 12,091 - -
Investment-linked units
- Unquoted 15,637 16,548 - -
Total financial assets at fair value
through profit or loss 86,370 174,609 11,610 10,879
All assets above are held for trading.
104

Notes To The Financial Statements
- 31 December 2006 (continued)
7 INVESTMENTS (continued)
(a) GENERAL AND SHAREHOLDERS’ FUNDS (continued)
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Available-for-sale financial assets
Equity securities
- Unquoted - 502 - -
Corporate debt securities
- Unquoted 63,752 60,761 - -
Malaysian Government Securities/
Treasury Bills/Bank Negara Malaysia papers 92,991 41,828 - -
Cagamas papers 24,997 30,029 - -
Total available-for-sale financial assets 181,740 133,120 - -
Held to maturity financial assets
Corporate debt securities
- Unquoted 15,765 10,714 - -
Malaysian Government Securities/
Treasury Bills/Bank Negara Malaysia papers 5,262 - - -
Total held to maturity financial assets 21,027 10,714 - -
Financial assets held to maturity are not presented on the Group’s balance sheet at their fair value. The fair value of the held to
maturity assets is RM21,750,000 (2005: RM10,961,000).
Fair values for held to maturity debt securities are based on market prices or broker/dealer price quotations. Where the
information is not available, fair value has been estimated using quoted market prices for securities with similar credit maturity
and yield characteristics.
Certain equity investments are held as collateral for a term loan facility obtained by the offshore subsidiary company as disclosed
in note 17 to the fi nancial statements.
105

Notes To The Financial Statements
- 31 December 2006 (continued)
7 INVESTMENTS (continued)
(b) LIFE FUND AND INVESTMENT – LINKED FUND
GROUP
INVESTMENT -
LIFE FUND
LINKED FUND
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
At fair value through profi t or loss 670,399 782,926 440,027 231,562
Available-for-sale 1,540,446 1,259,685 - -
Held to maturity 514,234 346,734 - -
2,725,079 2,389,345 440,027 231,562
The current portion of fi nancial assets is RM334,966,000 (2005:RM462,989,000), the remaining portion being non-current. The
assets included in each of the categories above are detailed in the tables below:
Investments held at fair value through profit or loss
GROUP
INVESTMENT -
LIFE FUND
LINKED FUND
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Equity securities
- Quoted 587,532 576,931 217,095 92,089
- Unquoted 2,092 2,094 - -
589,624 579,025 217,095 92,089
Unit trusts
- Quoted 12,936 10,045 10,195 3,460
- Unquoted 3,901 90,705 - -
16,837 100,750 10,195 3,460
Corporate debt securities
- Quoted 25,945 24,267 628 3,303
- Unquoted 35,754 75,770 94,785 112,114
61,699 100,037 95,413 115,417
Malaysian Government Securities/
Treasury Bills/Bank Negara Malaysia papers - - 86,119 -
Cagamas papers - - 10,153 -
Investment-linked units
- Unquoted 2,239 3,114 21,052 20,596
Total financial assets at fair value
through profit or loss 670,399 782,926 440,027 231,562
All assets above are held for trading.
106

Notes To The Financial Statements
- 31 December 2006 (continued)
7 INVESTMENTS (continued)
(b) LIFE FUND AND INVESTMENT – LINKED FUND (continued)
GROUP
INVESTMENT -
LIFE FUND
LINKED FUND
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Available-for-sale financial assets
Corporate debt securities
- Unquoted 774,423 797,471 - -
Malaysian Government Securities/
Treasury Bills/Bank Negara Malaysia papers 731,027 311,969 - -
Cagamas papers 34,996 150,245 - -
Total available-for-sale financial assets 1,540,446 1,259,685 - -
Held to maturity financial assets
Corporate debt securities
- Unquoted 425,848 356,734 - -
Impairment (13,656) (10,000) - -
412,192 346,734 - -
Malaysian Government Securities/
Treasury Bills/Bank Negara Malaysia papers 102,042 - - -
Total held to maturity financial assets 514,234 346,734 - -
Financial assets held to maturity are not presented on the Group’s balance sheet at their fair value. The fair value of the held to
maturity assets is RM553,129,000 (2005: RM340,574,000).
Fair values for held to maturity debt securities are based on market prices or broker/dealer price quotations. Where the
information is not available, fair value has been estimated using quoted market prices for securities with similar credit maturity
and yield characteristics.
107

Notes To The Financial Statements
- 31 December 2006 (continued)
8 LOANS AND RECEIVABLES
(a) GENERAL AND SHAREHOLDERS’ FUNDS
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Loans arising from:
Mortgage loans 61,953 40,926 635 750
Other secured loans 72,005 67,047 - -
Unsecured loans 101 78 13 1
134,059 108,051 648 751
Allowance for doubtful debts (29,031 ) (19,299 ) - -
Net loans 105,028 88,752 648 751
Lease, hire purchase and
other loan receivables (note 8(a)(i)) 188,436 188,476 - -
Receivables:
Trade receivables of non- Insurance subsidiaries 7,968 9,095 - -
Amount due from subsidiary companies - - 130,691 144,814
Amount due from related companies 6,136 6,955 - -
Outstanding proceeds from disposal of investments 2,087 2,880 - -
Income due and accrued 3,873 3,976 1 -
Assets held under Malaysian Motor Insurance Pool 2,450 2,450 - -
Amount due from life fund (note 15(b)) 41,097 28,160 - -
Manager’s stocks 6,947 6,825 - -
Other receivables, deposits and prepayments 16,607 16,812 5,506 1,282
The net loans can be analysed as follows:
87,165 77,153 136,198 146,096
380,629 354,381 136,846 146,847
Receivable within 12 months 84,608 83,460 80 64
Receivable after 12 months 20,420 5,292 568 687
105,028 88,752 648 751
108

Notes To The Financial Statements
- 31 December 2006 (continued)
8 LOANS AND RECEIVABLES (continued)
(a) GENERAL AND SHAREHOLDERS’ FUNDS (continued)
(i) Lease, hire purchase and other loan receivables
Gross investments in lease, hire purchase and other loan receivables:
GROUP
2006 2005
RM’000 RM’000
Not later than 1 year 160,087 204,694
Later than 1 year and not later than 5 years 58,169 17,280
Later than 5 years 4,594 7,415
222,850 229,389
Unearned future fi nance income (6,383) (8,311)
Future fi nance income in suspense (14,539) (17,932)
Allowance for doubtful debts (13,492) (14,553)
Unguaranteed residual value - (117)
Net investments in lease, hire purchase and other loan receivables 188,436 188,476
Representing:
Current receivables 135,939 170,353
Non-current receivables 52,497 18,123
The net investments in lease, hire purchase and other loan receivables
can be analysed as follows:
188,436 188,476
Not later than 1 year 135,939 170,353
Later than 1 year and not later than 5 years 48,198 11,488
Later than 5 years 4,299 6,635
188,436 188,476
Included in amounts due from subsidiary companies are advances to subsidiary companies amounting to RM 64,863,000
(2005: RM107,345,000) which bear interest rates ranging from 7.0% to 9.0% (2005: 7.0% to 8.8%) per annum and are currently
rolled over on a monthly basis.
Amounts due from related companies are unsecured, interest free and have no fi xed terms of repayment.
Lease, hire purchase and other loan receivables included loans
to the following related parties:
GROUP
2006 2005
RM’000 RM’000
Mithril Berhad 3,491 -
Mithril Saferay Sdn Bhd 70 95
Mithril Marketing Sdn Bhd 8,137 6,936
Tajo Berhad 16,069 16,063
The relationships of the above related parties are disclosed in note 42 to the fi nancial statements.
27,767 23,094
Included in the previous year’s balances are prior year adjustments made to loans and receivables of approximately
RM8,145,000 , increasing the carrying values of such loans and receivables, arising from the adoption of FRS 139. The effects
of the adjustment to the opening retained earnings for the fi nancial year ended 31 December 2005 is disclosed in note 23
to the fi nancial statements.
109

Notes To The Financial Statements
- 31 December 2006 (continued)
8 LOANS AND RECEIVABLES (continued)
(b) LIFE FUND AND INVESTMENT - LINKED FUND
GROUP
INVESTMENT -
LIFE FUND
LINKED FUND
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Loans arising from:
Policy loans 273,658 244,123 - -
Mortgage loans 479,542 366,977 - -
Other secured loans 287,124 266,952 - -
Unsecured loans 4,057 3,815 - -
1,044,381 881,867 - -
Allowance for doubtful debts (34,866 ) (27,650 ) - -
Net loans 1,009,515 854,217 - -
Receivables:
Outstanding proceeds from disposal of investments - 60,912 581 1,391
Income due and accrued 38,600 35,426 2,812 1,424
Amount due from investment-linked fund (note 15(b)) 9,572 5,358 - -
Amount due from shareholders’ fund (note 15(a)) 29,225 16,682 - -
Amount due from life fund (note 15(b)) - - 7,903 2,899
Prepaid leases/rentals 5,802 - - -
Other receivables, deposits and prepayments 22,949 13,806 342 1,270
The net loans can be analysed as follows:
106,148 132,184 11,638 6,984
1,115,663 986,401 11,638 6,984
Receivable within 12 months 899,030 673,760 - -
Receivable after 12 months 110,485 180,457 - -
1,009,515 854,217 - -
The estimated fair values of loans and receivables are the discounted amount of the estimated future cash fl ows expected to
be received. Expected cash fl ows are discounted at current market rates to determine the fair values, as shown below:
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Loans arising from:
- mortgage loans 697,855 403,625 504 708
- other secured loans 344,378 312,752 - -
Lease, hire purchase and other loan receivables 192,541 188,308 - -
1,234,774 904,685 504 708
110

Notes To The Financial Statements
- 31 December 2006 (continued)
8 LOANS AND RECEIVABLES (continued)
The effective interest rates on non-current receivables were as follows:
GROUP
COMPANY
2006 2005 2006 2005
% % % %
Mortgage loans 10.6 10.5 6.0 5.7
Other secured loans 11.1 11.0 - -
Unsecured loans 4.4 4.2 5.0 6.5
Lease, hire purchase and other loan receivables 6.1 5.7 - -
Included in the total loans portfolio of an insurance subsidiary company are non-performing (“NPL”) loans amounting to approximately
RM66,192,000 (2005: RM46,497,000) and RM468,130,000 (2005: RM217,750,000) in the general and shareholders’ fund and life fund
respectively, as at 31 December 2006. Concurrently, included in the total loans portfolio of the subsidiary company engaged in
hire purchase, leasing and other credit activities are NPL amounting to approximately RM163,310,000 (2005: RM114,211,000) in
the shareholders’ fund as at 31 December 2006. These NPLs were collateralised by properties and/or shares as pledged by the
borrowers. The insurance subsidiary company has assessed the value of the collaterals based on the methods prescribed in note
3(a)(iv) and have made additional allowances on doubtful debts where appropriate. Should the market value or adjusted value on
the collateral deviate by 10% or the recovery process be delayed by a year, particularly those loans with properties as collaterals,
there may a potential shortfall of approximately RM2,940,000 and RM7,820,000 for the NPLs in the general and shareholders’ fund
and life fund respectively.
9 INSURANCE RECEIVABLES
(a) GENERAL AND SHAREHOLDERS’ FUNDS
GROUP
2006 2005
RM’000 RM’000
Due premiums including agents, brokers and co-insurers balances 91,181 87,168
Due from reinsurers and cedants 20,985 21,331
112,166 108,499
Allowance for doubtful debts (27,120) (27,186)
(b) LIFE FUND
85,046 81,313
Due premiums including agents, brokers and co-insurers balances 40,262 46,701
10 SUBSIDIARY COMPANIES
COMPANY
2006 2005
Net
Net
Carrying tangible Carrying tangible
value assets value assets
RM’000 RM’000 RM’000 RM’000
Unquoted shares, at cost 252,076 318,443 252,076 320,343
111

Notes To The Financial Statements
- 31 December 2006 (continued)
10 SUBSIDIARY COMPANIES (continued)
Group’s effective
Country of
interest
Name of Company incorporation 2006 2005 Principal activities
% %
Malaysian Assurance Alliance Berhad Malaysia 100 100 General and life insurance
businesses
MAA Corporation Sdn Bhd Malaysia 100 100 Investment holding and
general trading
MAA Takaful Berhad Malaysia 50 - Dormant
Subsidiary companies of MAA
Corporation Sdn Bhd
MAA-Medicare Sdn Bhd Malaysia 100 100 Operation of charitable
dialysis centres
MAA Credit Sdn Bhd Malaysia 100 100 Hire purchase, leasing and
other credit activities
Malaysian Alliance Property Malaysia 100 100 Property management
Services Sdn Bhd
services
MAA International Assurance Ltd Labuan, 100 100 Offshore insurance and
Malaysia
reinsurance businesses
* MAAKL Mutual Bhd Malaysia 70 70 Unit trust funds management
MAA Holdings (BVI) Ltd British Virgin 100 100 Providing insurance
Islands
technical and fi nancial
consultancy services
MAA Corporate Advisory Sdn Bhd Malaysia 100 100 Providing corporate advisory
and consultancy services
# Wira Security Services Sdn Bhd Malaysia 100 100 Providing security services
and trading in security
equipment
MAA Financial Advisors Sdn Bhd Malaysia 100 100 Dormant
Maagnet Systems Sdn Bhd Malaysia 100 100 Providing information
technology consultancy
services
# Meridian Asset Management Malaysia 51 51 Investment holding
Holdings Sdn Bhd
Maaple Eldercare Sdn Bhd Malaysia 100 100 Dormant
MAA International Investments Ltd Labuan, 100 100 Investment holding
Malaysia
Menang Bernas Sdn Bhd Malaysia 100 100 Restaurant operator
Ukay Sentral Sdn Bhd Malaysia 100 100 Dormant
Jendela Sutera Sdn Bhd Malaysia 100 100 Dormant
Valiant Properties Sdn Bhd Malaysia 100 100 Dormant
MAA Claims Investigation
& Survey Sdn Bhd Malaysia 100 100 Dormant
Daman Development Sdn Bhd Malaysia 100 100 Dormant
112

Notes To The Financial Statements
- 31 December 2006 (continued)
10 SUBSIDIARY COMPANIES (continued)
Group’s effective
Country of
interest
Name of Company incorporation 2006 2005 Principal activities
% %
Subsidiary companies of MAA
Corporation Sdn Bhd (continued)
MyTele Direct Sdn Bhd Malaysia 100 100 Dormant
MAA International Corporation Ltd
Labuan,
Malaysia 100 100 Investment holding
Chelsea Parking Services Sdn Bhd Malaysia 100 100 Operating, maintaining
and managing car parks
Multioto Breakdown Assistance Sdn Bhd Malaysia 100 100 Provision of motor
breakdown assistance
services
MAA Universal Sdn Bhd Malaysia 100 100 Dormant
MAA Cards Sdn Bhd Malaysia 100 100 Dormant
MAA Fire-X Sdn Bhd Malaysia 55 55 Providing fi re risk assessment
and prevention services
MAA Private Equity Sdn Bhd Malaysia 100 - Dormant
MAA Cash Converter Sdn Bhd Malaysia 100 - Dormant
# High Sphere Sdn Bhd Malaysia 100 - Dormant
Subsidiary companies of Wira
Security Services Sdn Bhd
# Wira Security Services
(Sabah) Sdn Bhd Malaysia 100 100 Dormant
# Wira Security Services
(Sarawak) Sdn Bhd Malaysia 100 100 Dormant
Subsidiary company of
MAA Corporate Advisory Sdn Bhd
MAACA Labuan Ltd Labuan, 51 51 Providing offshore corporate
Malaysia
advisory and consultancy
services
Subsidiary company of
Maagnet Systems Sdn Bhd
MAAGNET – SSMS Sdn Bhd Malaysia 100 - Providing information
technology consultancy
services
Subsidiary companies of
Meridian Asset Management
Holdings Sdn Bhd
# Meridian Asset Management Sdn Bhd Malaysia 51 51 Fund management and
investment advisory services
# Meridian Asset Management (Asia) Ltd Labuan, 51 51 Fund management and
Malaysia
investment advisory Service
113

Notes To The Financial Statements
- 31 December 2006 (continued)
10 SUBSIDIARY COMPANIES (continued)
Group’s effective
Country of
interest
Name of Company incorporation 2006 2005 Principal activities
% %
Subsidiary companies of MAA
International Assurance Ltd
# P.T. MAA Life Assurance Indonesia 98 98 Life insurance business
# P.T. MAA General Assurance Indonesia 94 94 General insurance business
# Tuang Thai Co. Ltd Thailand 49 49 Investment holding
Subsidiary companies of MAA
International Investments Ltd
# MAA Mutualife Philippines, Inc. Philippines 100 100 Unit trust funds
management
# Columbus Capital Singapore Ltd Singapore 100 - Investment holding
Subsidiary company of MAA
International Corporation Ltd
# MAA Corporate & Compliance Phils. Inc. Philippines 100 100 Investment holding and
providing management
services
* A company that is 70% owned by the Company, 20% owned by a company controlled by a Director of the Company and the balance
10% owned by certain directors of the company.
# Subsidiary companies not audited by PricewaterhouseCoopers.
11 ASSOCIATED COMPANIES
COMPANY
2006 2005
Carrying Market Carrying Market
value value value value
RM’000 RM’000 RM’000 RM’000
Quoted shares, at cost 36,609 7,139 36,609 5,674
Less: impairment (31,025) (31,025)
5,584 5,584
Unquoted shares, at cost 50,494 11,976
Less: Impairment (6,409) (6,409)
44,085 5,567
Share of post acquisition profi t 3,670 2,878
53,339 14,029
114

Notes To The Financial Statements
- 31 December 2006 (continued)
11 ASSOCIATED COMPANIES (continued)
The Group’s interests in its associated companies are as follows:
GROUP
2006 2005
RM’000 RM’000
Revenue 33,542 23,520
Loss after taxation (2,853) (931)
Non-current assets 59,168 52,423
Current assets 62,025 24,409
Non-current liabilities (24,614) (26,065)
Current liabilities (43,240) (36,738)
53,339 14,029
The Group has not recognised losses from Mithril Berhad (“Mithril”) as the investment has been written down to a nominal carrying
amount of RM1 in 2004, the year of acquisition. In addition, the Group has not recovered the extent of net liabilities which the Group
had acquired in the year of acquisition. The net liabilities that the Group had acquired then amounted to RM16,477,000.
Share of post acquisition losses in Mithril not recognised:
GROUP
2006 2005
RM’000 RM’000
At beginning of fi nancial year 2,010 1,854
Share of post acquisition loss during the fi nancial year 4,693 156
At end of fi nancial year 6,703 2,010
In April 2006, holders of Irredeemable Convertible Unsecured Loan Stock 2004/2009 (“ICULS”) of Mithril converted in total RM920,500
ICULS to 920,500 new ordinary shares of RM1 each in Mithril, diluting the Group’s interest in Mithril from 34% to 33%.
In the previous fi nancial year during the fi rst 5 months ended 30 May 2005, holders of Redeemable Convertible Unsecured Loan
Stock (“RCULS”) of Mithril converted RM18.9 million RCULS to 18.9 million ordinary shares of RM1 each in Mithril, diluted the Groups’
interest in Mithril from 37% to 30%. On 30 May 2005, the Group exercised conversion of 5.6 million Mithril warrants to 5.6 million ordinary
shares of RM1 each raising its interest in Mithril from 30% to 34% to maintain the minimum level required of 33% as imposed by the
Securities Commission during the duration of the warrants pursuant to the debt restructuring exercise of Tajo Berhad.
Subsequently on September 2005, holders of RCULS of Mithril converted another RM1.37 million RCULS to 1.37 million ordinary shares
of RM1 each in Mithril. The Group’s interest in Mithril remained at a level above 33% after the last RCULS conversion.
Gain on dilution of interest in Mithril not recognised:
GROUP
2006 2005
RM’000 RM’000
At beginning of fi nancial year 7,884 3,197
Gain on dilution of investments arising during the fi nancial year 366 4,687
At end of fi nancial year 8,250 7,884
115

Notes To The Financial Statements
- 31 December 2006 (continued)
11 ASSOCIATED COMPANIES (continued)
COMPANY
2006 2005
Carrying Market Carrying Market
value value value value
RM’000 RM’000 RM’000 RM’000
Quoted shares, at cost 29,894 5,829 29,894 4,634
Less : impairment loss (24,065)
5,829 29,894
Unquoted shares, at cost 2,764 1,450
8,593 31,344
Details of the associated companies are as follows:
Group’s effective
Country of
interest
Name of Company incorporation 2006 2005 Principal activities
% %
* Nishio Rent All (M) Sdn Bhd Malaysia 30 30 Renting of construction
and industrial equipment
MAA Bancwell Trustee Berhad Malaysia 49 49 Trust fund management
and trust services
* Mithril Berhad Malaysia 33 34 Investment holding
* Maybach Logistics Sdn Bhd Malaysia 45 45 Provision of transportation
and logistics
Associated companies of MAA
International Assurance Ltd
and Tuang Thai Co. Ltd.
MAA General Assurance Philippines, Inc Philippines 40 40 General insurance business
MAAKK Wealth Management Co. Ltd. Thailand - 42 Providing fi nancial planning
and advisory services
Associated company of
Columbus Capital Singapore Ltd
Columbus Capital Pty Limited Australia 43 - Retail mortgage lending
and loan securitisation
Subsidiary company of MAAKK
Wealth Management Co. Ltd.
MAAKK General Broker Co. Ltd. Thailand - 100 Dormant
* The fi nancial year-ends of these associated companies are not co-terminous with the Group. However, for purposes of consolidation,
these associated companies had prepared fi nancial statements as at the same balance sheet date as the fi nancial statements of the
Group.
116

Notes To The Financial Statements
- 31 December 2006 (continued)
12 DEFERRED TAX
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when the deferred taxes relate to the same tax authority.
The following amounts, determined after appropriate offsetting, are shown in the balance sheet:
GROUP
General and
Investment-
Shareholders’ funds Life fund linked fund
2006 2005 2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Deferred tax assets 6,890 9,597 10,305 13,694 31 154
Deferred tax liabilities (1,890) (4,805) (3,948) (4,101) (3,467) (163)
5,000 4,792 6,357 9,593 (3,436 ) (9 )
At 1 January/(as reported) 4,792 4,057 9,593 1,607 (9 ) (735 )
(Charged)/credited to
income statements/
revenue accounts (note 30):
- property, plant and equipment (255) 289 1,271 1,522 - -
- investments (1,756) 3,992 (620) 2,418 (3,427) 726
- tax losses (1,298) (340) (4,174) - - -
- unabsorbed capital allowances 406 50 - - - -
- unearned premium reserves (18) 193 - - - -
- loans and receivables 1,712 (3,144) - (154) - -
- post employment benefi t 1,696 - - - - -
- others (580) 32 21 - - -
(93 ) 1,072 (3,502 ) 3,786 (3,427 ) 726
Charged to equity 266 (337) 248 (400) - -
Prior year adjustment - - - 4,600 - -
Currency translation differences 35 - 18 - - -
At 31 December 5,000 4,792 6,357 9,593 (3,436 ) (9 )
Subject to income tax:
Deferred tax assets (before offsetting)
Property, plant and equipment 67 - 1,078 - - -
Investments 4,317 8,370 14,160 14,825 31 154
Tax losses 2,183 1,732 - - - -
Unabsorbed capital allowances 4,195 213 - - - -
Loans and receivables (770) - (4,174) - - -
Others (145) 62 37 - - -
9,847 10,377 11,101 14,825 31 154
Offsetting (2,957) (780) (796) (1,131) - -
Deferred tax assets (after offsetting) 6,890 9,597 10,305 13,694 31 154
Deferred tax liabilities (before offsetting)
Property, plant and equipment (1,711) (2,379) (796) (1,131) - -
Investments (1,252) - (3,948) (3,947) (3,467) (163)
Unearned premium reserves - (31) - - - -
Loans and receivables (1,884) - - - - -
Others - (3,175) - (154) - -
(4,847) (5,585) (4,744) (5,232) (3,467) (163)
Offsetting 2,957 780 796 1,131 - -
Deferred tax liabilities (after offsetting) (1,890 ) (4,805 ) (3,948 ) (4,101 ) (3,467 ) (163 )
117

Notes To The Financial Statements
- 31 December 2006 (continued)
12 DEFERRED TAX (continued)
COMPANY
2006 2005
RM’000 RM’000
Deferred tax assets 6,847 690
At 1 January 690 150
(Charged)/credited to income statement (note 30):
- property, plant and equipment 6,716 (16)
- investments (566) 506
- unabsorbed capital allowances 7 50
6,157 540
At 31 December 6,847 690
Subject to income tax:
Deferred tax assets (before offsetting)
Investments 6,738 566
Unabsorbed capital allowances 220 213
6,958 779
Offsetting (111) (89)
Deferred tax assets (after offsetting) 6,847 690
Deferred tax liabilities (before offsetting)
Property, plant and equipment (111) (89)
Offsetting 111 89
Deferred tax liabilities (after offsetting) - -
The amount of deductible temporary differences and unused tax losses (both of which have no expiry date) for which no deferred
tax assets are recognised in the balance sheet is as follows:
GROUP
2006 2005
RM’000 RM’000
Deductible temporary differences 845 932
Tax losses 2,486 3,498
3,331 4,430
The deferred tax liabilities arising from the temporary differences associated with the unallocated surplus carried forward of the
Group’s life fund to be transferred to the shareholders’ fund have not been disclosed in the fi nancial statements due to the
subjectivity in determining the amount to be transferred.
118

Notes To The Financial Statements
- 31 December 2006 (continued)
13 PROVISION FOR OUTSTANDING CLAIMS
GROUP
2006 2005
RM’000 RM’000
(a) GENERAL AND SHAREHOLDERS’ FUNDS
Provision for outstanding claims 442,820 432,403
Less: Recoverable from reinsurers (137,793) (145,070)
Net outstanding claims 305,027 287,333
(b) LIFE FUND
Provision for outstanding claims 26,915 26,084
Less: Recoverable from reinsurers (10,186) (11,645)
Net outstanding claims 16,729 14,439
14 INSURANCE PAYABLES
(a) GENERAL AND SHAREHOLDERS’ FUNDS
GROUP
2006 2005
RM’000 RM’000
Due to agents, brokers and co-insurers 26,877 30,930
Due to reinsurers and cedants 42,410 22,942
Reinsurers’ deposits withheld 8,085 8,642
(b) LIFE FUND
77,372 62,514
Due to agents, brokers and co-insurers 442,102 366,278
Due to reinsurers and cedants 2,102 2,593
Premium deposits 16,027 45,491
460,231 414,362
119

Notes To The Financial Statements
- 31 December 2006 (continued)
15 TRADE AND OTHER PAYABLES
(a) GENERAL AND SHAREHOLDERS’ FUNDS
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Trade payables from non-insurance
subsidiary companies 4,662 4,491 - -
Other payables
Cash collaterals held for bond business 27,223 24,064 - -
Unclaimed monies 3,140 3,156 - -
Amount due to a Director 145 145 - -
Amount due to life fund (note 8(b)) 29,225 16,682 - -
Defi ned contribution retirement plan payable 1,595 1,121 147 109
Accrual for unutilised staff leave 1,945 1,716 223 150
Stakeholders’ deposits 1,450 1,450 - -
Hire purchase creditors 1,751 81 987 -
Payroll liabilities 2,495 70 - -
Amount due to stockbrokers - 301 - -
Duties and other taxes payable 2,061 2,226 - -
Other payables and accruals 23,655 19,314 719 199
94,685 70,326 2,076 458
99,347 74,817 2,076 458
Amount due to a Director by a subsidiary company is unsecured, interest free and has no fi xed terms of repayment.
The hire purchase creditors can be analysed as follows:
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Payable within 1 year 391 19 208 -
Payable between 2 years to 5 years 1,360 62 779 -
1,751 81 987 -
The hire purchase creditors of the Group and the Company bear interest at the rates ranging from 2.4% to 3.9% (2005: 2.6% to
3.9%) per annum and 2.4% to 3.9% (2005: nil) per annum respectively.
120

Notes To The Financial Statements
- 31 December 2006 (continued)
15 TRADE AND OTHER PAYABLES (continued)
(b) LIFE FUND AND INVESTMENT-LINKED FUND
GROUP
INVESTMENT -
LIFE FUND
LINKED FUND
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Other payables
Accrued interest payable 30,044 26,117 - -
Unclaimed monies 7,542 5,237 - -
Amount due to shareholders’ fund (note 8(a)) 41,097 28,160 - -
Amount due to investment-linked fund (note 8(b)) 7,903 2,899 - -
Amount due to life fund (note 8(b)) - - 9,572 5,358
Defi ned contribution retirement plan payable 621 582 - -
Accrual of unutilised staff leave 987 868 - -
Rental deposits 6,159 6,074 - -
Payroll liabilities 4,871 3,804 - -
Amount due to stockbrokers 8,865 - - -
Duties and other taxes payable 327 307 - -
Other payables and accruals 14,292 15,859 9,866 3,945
122,708 89,907 19,438 9,303
16 BONDS - UNSECURED
GROUP/COMPANY
2006 2005
RM’000 RM’000
RM120 million 6-year structured serial bonds 30,000 60,000
Analysis of the bonds:
Payable within 1 year 30,000 30,000
Payable between 1 year to 2 years - 30,000
30,000 60,000
In the fi nancial year ended 31 December 2001, the Company issued RM120 million 6-year structured serial bonds (“the Bonds”) in a
total of 5 tranches, comprising 3 tranches with a nominal value of RM20 million each and 2 tranches with a nominal value of RM30
million each, to the primary subscribers. The tenure of the Bonds ranges from 2 to 6 years from the date of issue and bear interest
rates ranging from 5.80% to 8.20% per annum, payable semi-annually in advance, beginning from the date of issue and every 6
months thereafter. The Bonds are traded in a secondary market on a willing-buyer willing-seller basis.
During the fi nancial year, the interest rates charged were in the range of 7.70% to 8.20% (2005: 7.20% to 8.20%) per annum.
The Bonds were constituted by a trust deed dated 6 August 2001 between the Company and the trustee, to act for the benefi t of
the bondholders.
The Bonds are secured against an assignment of dividend proceeds from the Company’s wholly owned subsidiary company,
Malaysian Assurance Alliance Berhad (“MAA”), a fi rst fi xed charge over the designated accounts, a fi rst fi xed charge over all
permitted investments out of all designated accounts and an assignment over the Company’s rights under a Dividend Upstream
Agreement which was signed on 6 August 2001.
Under the Dividend Upstream Agreement, MAA shall, so long as the Bonds remain outstanding, declare and pay by a date to be
agreed each year, a minimum dividend which after deduction of the Company’s projected tax and operating expenses for the
fi nancial year, would leave the Company with a net amount of RM20 million. Such declaration and payment of dividend shall be
subject to the availability of distributable reserves, legal and regulatory constraints.
121

Notes To The Financial Statements
- 31 December 2006 (continued)
16 BONDS - UNSECURED (continued)
Proceeds from the issue of the Bonds were utilised to fi nance the purchase of redeemable preference shares issued by the Company’s
wholly owned subsidiary company, MAA Corporation Sdn Bhd, from MAA, to refi nance its bank borrowings, to fund the Company’s
investment in MAA Corporation Sdn Bhd, to pre-fund the fi rst two interest service payments and to supplement the Company’s
working capital requirements including discount on the issue of the Bonds and expenses in connection with the arrangement of the
facility.
The Bonds unless repurchased and cancelled, shall be redeemed at the price of 100% of the nominal value of the Bonds at the
maturity dates.
Subsequent to the fi nancial year ended 31 December 2006, the Company issued a RM200 million Commercial Papers/Medium Term
Notes Programme for a tenure of 5 years, of which, RM30 million being proceeds from the new issue, has been earmarked towards
settlement of the fi nal principal instalment of the Bonds which is due in August 2007.
17 TERM LOANS
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Term loans:
- Unsecured 30,000 30,000 30,000 30,000
- Secured 39,935 37,155 - -
69,935 67,155 30,000 30,000
Payable within 1 year 39,935 37,155 - -
Payable between 1 year to 2 years 30,000 - 30,000 -
Payable between 2 years to 5 years - 30,000 - 30,000
69,935 67,155 30,000 30,000
The unsecured term loan of RM30,000,000 from a licensed bank of the Company bears a fi xed interest rate of 7.5% (2005: 7.5%) per
annum. The loan is to be settled by a bullet repayment at the end of seven years from the date of full disbursement of the loan.
In connection with this term loan, the Company has signed a deed of assignment of dividend proceeds with the said bank on
29 June 2001. Under the terms of the deed, the Company has assigned unto the bank, the dividend proceeds payable to the
Company by its subsidiary companies, MAA and MAA Corporation Sdn Bhd, for the fi nancial year ending 31 December 2007 (“the
Dividend Payment”) and all rights, titles and benefi ts of the Dividend Payment to the bank by way of continuing security.
In the previous year, the offshore subsidiary company of the Group obtained a term loan facility of US$12 million from an offshore
fi nancial instituition. The loan is secured against certain offshore equity investments of the offshore subsidiary company and to
be settled at the end of one year from the date of drawndown. As at 31 December 2005, an amount of US$9.8 million has been
drawndown. The secured term loan bears an interest rate of 1.0% per annum above the applicable Singapore Inter-Bank Offer Rate
(“SIBOR”) payable monthly basis in arrears. During the fi nancial year, the interest rate charged was in the range of 5.40% to 6.40%
(2005: 4.30% to 5.20%) per annum. The loan is fully settled during the fi nancial year with proceeds received from sale of the offshore
equity investments.
During the fi nancial year, the offshore subsidiary company of the Group obtained a term loan facility of US$12 million from an
offshore fi nancial institution. The loan is secured against certain offshore equity investments of the offshore subsidiary company and
corporate guarantee from the Company and to be settled at the end of 6 months from the date of drawndown.
As at 31 December 2006, an amount of US$11.2 million has been drawndown. The secured term loan bears an interest rate of 1.0%
per annum above the applicable SIBOR payable monthly basis in arrears. During the fi nancial year, the interest rate charged was in
the range of 5.40% to 6.40% per annum.
122

Notes To The Financial Statements
- 31 December 2006 (continued)
18 BANK OVERDRAFTS - UNSECURED
The unsecured bank overdraft facility of the Company has a limit of RM20 million and bears an interest rate of 2.0% per annum
above the prevailing base lending rate. During the fi nancial year, the interest rate charged was in the range of 8.0% to 8.25% (2005:
8.0% to 8.25%) per annum.
The unsecured bank overdraft facility of a subsidiary company has a limit of RM10 million and bears an interest rate of 2.5% per
annum above the prevailing base lending rate. During the fi nancial year, the interest rate charged was 8.75% (2005: 8.75%) per
annum.
The unsecured bank overdraft facilities of the shareholders’ fund, general fund and life fund of an insurance subsidiary company
of the Company have limits of RM3.5 million, RM2.0 million and RM3.0 million (2005: RM3.5 million, RM2.0 million and RM3.0 million)
respectively. During the fi nancial year, the interest rates charged were 8.25% (2005: 8.5%) per annum. There were no overdrawn
facilities utilised at the balance sheet date by the insurance subsidiary company.
19 UNEARNED PREMIUM RESERVES
GENERAL FUND
GROUP
2006
Marine,
Motor Motor Aviation Misce-
Fire vehicles cycles & Transit llaneous Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At beginning of fi nancial year 13,189 92,219 16,787 1,573 27,581 151,349
Currency translation differences (1,164) (418) - 14 990 (578)
(Decrease)/increase in reserves 464 (8,524) (1,032) 1,689 2,606 (4,797)
At end of fi nancial year 12,489 83,277 15,755 3,276 31,177 145,974
2005
At beginning of fi nancial year 11,779 83,620 13,266 1,469 23,508 133,642
Currency translation differences (70) (199) - (251) 198 (322)
Increase in reserves 1,480 8,798 3,521 355 3,875 18,029
At end of fi nancial year 13,189 92,219 16,787 1,573 27,581 151,349
20 LIFE POLICYHOLDERS’ FUND
Actuarial liabilities
GROUP
2006 2005
RM’000 RM’000
At beginning of fi nancial year 4,350,602 3,834,996
Add:
Increase in policy reserves
- on normal business during the fi nancial year 298,465 239,739
- on reassumed business previously ceded - 113,572
Bonus allocated to participating policyholders,
including interim bonus from normal surplus 199,878 175,596
498,343 528,907
Less: Interim bonus (30,902 ) (13,301 )
At end of fi nancial year 4,818,043 4,350,602
123

Notes To The Financial Statements
- 31 December 2006 (continued)
20 LIFE POLICYHOLDERS’ FUND (continued)
GROUP
2006 2005
RM’000 RM’000
Unallocated surplus
At beginning of fi nancial year 523,473 612,090
Adjustments due to change in accounting policies (net of tax):
- fi nancial assets at fair value through profi t or loss - (1,683)
- investment properties at fair value - 63,300
- leasehold land reclassifi ed as prepaid lease payment (659) -
Prior year adjustment (note 43(b)) - (52,900)
At beginning of fi nancial year – restated 522,814 620,807
Add: Surplus arising during the fi nancial year 271,725 98,488
Less: Bonus allocated to participating policyholders,
including interim bonus from normal surplus (199,878) (175,596)
Transfer to Income Statement (34,323) (20,226)
37,524 (97,334 )
At end of fi nancial year 560,338 523,473
Life policyholders’ fund at end of fi nancial year:
Actuarial liabilities 4,818,043 4,350,602
Unallocated surplus 560,338 523,473
5,378,381 4,874,075
In the previous fi nancial year, an insurance subsidiary company terminated its quota share reinsurance treaty arrangement which
was originally entered into in 1997. Under the terms of the treaty, the insurance subsidiary company withholds reinsurance deposits
equal to the actuarial valuation in the life fund on the block of business reinsured. As a result of the termination, the liabilities to
policyholders for ordinary life non-participating policies for the fi nancial year ended 31 December 2005, increased by RM113,572,000,
representing the liabilities of the previously ceded non-participating life business that the insurance subsidiary company had to
reassume as part of its business.
21 SHARE CAPITAL
Authorised ordinary shares of RM1 each:
GROUP/COMPANY
2006 2005
RM’000 RM’000
At beginning and end of fi nancial year 500,000 500,000
Issued and fully paid ordinary shares of RM1 each:
At beginning of fi nancial year 152,177 152,177
Issue of bonus shares during the fi nancial year 152,177 -
At end of fi nancial year 304,354 152,177
On 8 September 2006, the company made a bonus issue of 152,176,876 new ordinary shares of RM1 each on the basis of 1 new
ordinary share of RM1 each for every 1 existing ordinary shares of RM1 each, by capitalising RM11,744,389 from share premium and
RM140,432,487 from retained earnings.
The newly issued shares rank pari passu in all respect with the existing shares of the Company.
124

Notes To The Financial Statements
- 31 December 2006 (continued)
22 SHARE PREMIUM
GROUP/COMPANY
2006 2005
RM’000 RM’000
At beginning of fi nancial year 11,744 11,744
Capitalisation for bonus issue (11,744) -
At end of fi nancial year - 11,744
23 RESERVES
(a) GENERAL AND SHAREHOLDERS’ FUNDS
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Retained earnings 67,688 225,515 41,442 181,626
Reserves:
- Foreign exchange reserve (5,203) 122 - -
- Asset revaluation reserve 825 941 - -
- Revaluation reserve 592 867 - -
Movements in retained earnings
(3,786 ) 1,930 - -
63,902 227,445 41,442 181,626
At beginning of fi nancial year
As previously stated 225,515 194,644 181,626 216,192
Prior year adjustment - - - (59,400)
Adjustments due to change in
accounting policies (net of tax):
- fi nancial assets at fair value through profi t or loss - (306) - (688)
- loans and receivables - 4,667 - -
- investment properties at fair value - 6,718 - -
- 11,079 - (688 )
As restated 225,515 205,723 181,626 156,104
(Loss)/profi t for the fi nancial year (2,176) 42,619 15,467 48,349
Capitalisation for bonus issue (140,433) - (140,433) -
Dividends paid for the previous fi nancial year (15,218) (22,827) (15,218) (22,827)
(157,827 ) 19,792 (140,184 ) 25,522
At end of fi nancial year 67,688 225,515 41,442 181,626
Movement in foreign exchange reserve
At beginning of fi nancial year 122 (93) - -
Current translation differences
arising during the fi nancial year (5,325) 215 - -
At end of fi nancial year (5,203 ) 122 - -
125

Notes To The Financial Statements
- 31 December 2006 (continued)
23 RESERVES (continued)
(a) GENERAL AND SHAREHOLDERS’ FUNDS (continued)
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Movement in asset revaluation reserve
At beginning of fi nancial year 941 - - -
Adjustments due to change in
accounting policies - net of tax - 1,195 - -
At beginning of fi nancial year - restated 941 1,195 - -
Revaluation - gross (566) (354) - -
Revaluation - tax 159 100 - -
Reversal of realised loss in disposals 291 - - -
(116 ) (254 ) - -
At end of fi nancial year 825 941 - -
Movement in revaluation reserve
At beginning of fi nancial year - - - -
Adjustments due to change in
accounting policies – net of tax 867 867 - -
At beginning of fi nancial year - restated 867 867 - -
Reversal of surplus arising on revaluation:
- gross (382) - - -
- tax 107 - - -
(275 ) - - -
At end of fi nancial year 592 867 - -
The asset revaluation reserve represents the fair value gains or losses from available-for-sale fi nancial assets.
The revaluation reserve represents the surplus arising from the revaluation of self-occupied freehold land and buildings and
leasehold buildings of the Group. The change in the accounting policy is described in note 43 to the fi nancial statements.
The retained earnings balance represents the amount available for dividend distribution to the equity shareholders of the
Company.
Subject to agreement by the Inland Revenue Board, the Company has suffi cient tax credits under Section 108 of the Income
Tax Act, 1967 and tax exempt account under Section 12 of the Income Tax (Amendment) Act, 1999 to frank all of its retained
earnings at 31 December 2006, if paid out as dividends
(b) LIFE FUND
GROUP
2006 2005
RM’000 RM’000
Asset revaluation reserve 9,340 9,040
Revaluation reserve 3,790 4,598
13,130 13,638
126

Notes To The Financial Statements
- 31 December 2006 (continued)
23 RESERVES (continued)
(b) LIFE FUND (continued)
GROUP
2006 2005
RM’000 RM’000
Movement in asset revaluation reserve
At beginning of fi nancial year 9,040 -
Adjustments due to change in accounting policies – net of tax - 10,618
At beginning of fi nancial year - restated 9,040 10,618
Revaluation – gross (2,213) (1,715)
Revaluation – tax 177 137
Reversal of realised loss on disposals 2,336 -
300 (1,578 )
At end of fi nancial year 9,340 9,040
Movement in revaluation reserve
At beginning of fi nancial year - -
Adjustments due to change in accounting policies – net of tax 4,598 4,598
At beginning of fi nancial year - restated 4,598 4,598
Reversal of surplus arising on revaluation:
– gross (879) -
– tax 71 -
(808 ) -
At end of fi nancial year 3,790 4,598
The assets revaluation reserve represents the fair value gains or losses from available-for-sale fi nancial assets.
The revaluation reserve represents the surplus arising from the revaluation of self-occupied freehold land and buildings and
leasehold buildings of the Group. The change in the accounting policy is described in note 43 to the fi nancial statements.
Distribution of the surplus arising from the revaluation of the Life Fund’s assets in the insurance subsidiary company may be made
by way of bonuses to life policyholders, subject to the limit that the amount distributed should not be more than 30% of the
revaluation reserve or 10% of the fair value of the revalued property, whichever is lower.
127

Notes To The Financial Statements
- 31 December 2006 (continued)
24 OPERATING REVENUE
2006
GROUP
Shareholders’ General Life Investmentfunds
fund fund linked fund Total
RM’000 RM’000 RM’000 RM’000 RM’000
Gross premium income - 452,637 1,229,163 218,797 1,900,597
Investment income (note 25) 3,573 23,921 277,341 18,861 323,696
Gross interest income from hire purchase,
leasing and other credit activities 11,472 - - - 11,472
Income from property management,
unit trust fund management,
security services and consultancy services 48,120 - - - 48,120
2005
63,165 476,558 1,506,504 237,658 2,283,885
Gross premium income - 459,965 1,280,260 142,676 1,882,901
Investment income (note 25) 3,305 23,267 229,408 11,949 267,929
Gross interest income from hire purchase,
leasing and other credit activities 10,063 - - - 10,063
Income from property management,
unit trust fund management,
security services and consultancy services 44,527 - - - 44,527
57,895 483,232 1,509,668 154,625 2,205,420
Gross premium income stated in the life insurance revenue account comprises both gross premium income from the life fund and
the investment-linked fund.
COMPANY
2006 2005
RM’000 RM’000
Investment income (note 25(a)) 56,168 90,634
Management fees (note 27(a)) 2,868 2,680
59,036 93,314
25 INVESTMENT INCOME
(a) SHAREHOLDERS’ FUND
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Interest income from:
Financial assets:
Corporate debt securities
- at available-for-sale - 121 - -
Loans and receivables
- mortgage loans 42 47 42 47
- other secured and unsecured loans 884 286 1 1
- other receivables 4 24 6,984 7,929
Fixed and call deposits 1,107 625 241 157
2,037 1,103 7,268 8,134
128

Notes To The Financial Statements
- 31 December 2006 (continued)
25 INVESTMENT INCOME (continued)
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
(a) SHAREHOLDERS’ FUND (continued)
Gross dividends from equity securities of corporations:
- at fair value through profi t or loss 1,642 2,318 - -
- subsidiary companies - - 48,900 82,500
1,642 2,318 48,900 82,500
Gross rental income 208 216 - -
Less: Rates and maintenance
for investment properties (314) (331) - -
(106 ) (115 ) - -
Others - (1) - -
3,573 3,305 56,168 90,634
(b) GENERAL FUND
GROUP
2006 2005
RM’000 RM’000
Interest income from:
Financial assets:
Malaysian Government Securities/Treasury Bills/
Bank Negara Malaysia papers
- at available-for-sale 2,857 2,589
- at held to maturity 164 -
Cagamas papers
- at available-for-sale 983 1,212
Corporate debt securities
- at fair value through profi t or loss 1,327 687
- at available-for-sale 4,371 3,389
- at held to maturity 858 482
Loans and receivables
- mortgage loans 2,825 6,120
- other secured and unsecured loans 5,890 2,878
Fixed and call deposits 4,776 3,057
24,051 20,414
(Amortisation of premiums)/accretion of discounts from:
Financial assets:
Malaysian Government Securities/Treasury Bills/
Bank Negara Malaysia papers
- at available-for-sale (1,335) (1,227)
- at held to maturity 167 -
Cagamas papers
- at available-for-sale - 7
Corporate debt securities
- at fair value through profi t or loss (189) -
- at available-for-sale 302 427
- at held to maturity - (2)
(1,055 ) (795 )
Gross dividends from equity securities of corporations:
- at fair value through profi t or loss 1,069 3,354
Gross rental income 1,861 1,682
Less: Rates and maintenance for investment properties (2,006) (1,393)
(145 ) 289
Others 1 5
23,921 23,267
129

Notes To The Financial Statements
- 31 December 2006 (continued)
25 INVESTMENT INCOME (continued)
GROUP
2006 2005
RM’000 RM’000
(c) LIFE FUND
Interest income from:
Financial assets:
Malaysian Government Securities/Treasury Bills/
Bank Negara Malaysia papers
- at available-for-sale 17,464 14,885
- at held to maturity 2,581 -
Cagamas papers
- at available-for-sale 3,589 6,727
Corporate debt securities
- at fair value through profi t or loss 8,844 6,584
- at available-for-sale 48,842 51,431
- at held to maturity 12,414 12,781
Loans and receivables
- mortgage loans 60,126 37,985
- policy loans 21,059 18,682
- other secured and unsecured loans 33,616 14,891
Fixed and call deposits 24,833 19,049
233,368 183,015
(Amortisation of premiums)/accretion of discounts from:
Financial assets:
Malaysian Government Securities/Treasury Bills/
Bank Negara Malaysia papers
- at available-for-sale (3,807) (4,209)
- at held to maturity (49) -
Cagamas papers
- at available-for-sale 56 (129)
Corporate debt securities
- at available-for-sale 1,099 3,556
- at held to maturity 10,177 7,014
7,476 6,232
Gross dividends from equity securities of corporations:
- at fair value through profi t or loss 28,985 33,631
Gross rental income 23,417 18,241
Less: Rates and maintenance for investment properties (15,905) (12,895)
7,512 5,346
Others - 1,184
277,341 229,408
130

Notes To The Financial Statements
- 31 December 2006 (continued)
25 INVESTMENT INCOME (continued)
GROUP
2006 2005
RM’000 RM’000
(d) INVESTMENT-LINKED FUND
Interest income from:
Financial assets:
Malaysian Government Securities/Treasury Bills/
Bank Negara Malaysia papers 154 -
Cagamas papers 852 -
Corporate debt securities
- at fair value through profi t or loss 5,496 4,109
Fixed and call deposits 3,067 1,552
9,569 5,661
(Amortisation of premium)/accretion of discounts from
Financial assets:
Malaysian Government Securities/Treasury Bills/
Bank Negara Malaysia papers (75) -
Cagamas papers (6) -
Corporate debt securities
- at fair value through profi t or loss 318 538
237 538
Gross dividends from equity securities of corporations:
- at fair value through profi t or loss 7,546 5,316
Others 1,509 434
18,861 11,949
26 OPERATING REVENUE FROM NON-INSURANCE SUBSIDIARIES
Revenue from non-insurance businesses:
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
- management fee income 2,833 515 - -
- unit trust fund management fee income 10,305 7,639 - -
- unit trust fund initial service fee 12,310 12,313 - -
- interest income from hire purchase,
leasing and other credit activities 11,472 10,063 - -
- billings for securities services 19,714 19,215 - -
- other 2,958 4,845 - -
59,592 54,590 - -
131

Notes To The Financial Statements
- 31 December 2006 (continued)
27 OTHER OPERATING INCOME/(EXPENSES) - NET
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
(a) SHAREHOLDERS’ FUND
Gain/(loss) on disposal of
Financial assets:
Equity securities
- at fair value through profi t or loss (1,025) - - -
Corporate debt securities
- at available-for-sale - 303 - -
Unit trusts
- at fair value through profi t or loss - 73 - -
(1,025 ) 376 - -
Net fair value gain/(loss) of fi nancial assets
at fair value through profi t or loss:
- equity securities 4,667 34,592 731 (2,021)
- unit trusts 51 (141) - -
4,718 34,451 731 (2,021 )
Net fair value loss on investment properties (3,045 ) (250 ) - -
Net fair value gain on manager’s stocks - 26 - -
Impairment loss on associated company - - (24,065 ) -
Property, plant and equipment:
- loss on disposal (56) (51) (56) (105)
- write off (7) (429) (6) -
Management fee income - - 2,868 2,680
Commission paid and payable to unit trusts agents (10,582) (10,312) - -
Write back of/(allowance for) doubtful debts on loans 492 (231) - -
Write back of /(allowance for) doubtful
debts on lease,hire purchase and loan receivables - net 1,061 892 - -
Bad debts written off (10,737) (424) - -
Loss on disposal of associated company (793) - - -
Others 1,368 411 5 (4)
(19,254 ) (10,118 ) (21,254 ) 2,571
Other operating (expenses)/income - net (18,606 ) 24,459 (20,523 ) 550
132

Notes To The Financial Statements
- 31 December 2006 (continued)
27 OTHER OPERATING INCOME/(EXPENSES) - NET (continued)
(b) GENERAL FUND
COMPANY
2006 2005
RM’000 RM’000
Gain/(loss) on disposal of
Financial assets:
Equity securities
- at fair value through profi t or loss (9,372) (20,647)
Corporate debt securities
- at available-for-sale (239) 1
Unit trusts
- at fair value through profi t or loss 128 -
Investment properties (686) 686
(10,169 ) (19,960 )
Net fair value gain/(loss) of fi nancial assets
at fair value through profi t or loss:
- equity securities 17,310 (9,664)
- corporate debt securities (3,872) (282)
- unit trusts 203 (392)
- investment-linked units 643 (184)
14,284 (10,522 )
Net fair value (loss)/gain on investment properties (252 ) 282
(Loss)/gain on disposal of property, plant and equipment (51) 145
(Allowance for)/write back of doubtful debts on loans (4,642) 1,142
Others 1,412 482
(3,281 ) 1,769
Other operating income/(expenses) - net 582 (28,431 )
(c) LIFE FUND
Gain/(loss) on disposal of
Financial assets:
Equity securities
- at fair value through profi t or loss (4,146) (39,197)
Corporate debt securities
- at fair value through profi t or loss 558 2,205
- at available-for-sale (2,335) 8,694
Unit trusts
- at fair value through profi t or loss (4,248) (117)
Investment properties 5 12,288
(10,166 ) (16,127 )
133

Notes To The Financial Statements
- 31 December 2006 (continued)
27 OTHER OPERATING INCOME/(EXPENSES) - NET (continued)
COMPANY
2006 2005
RM’000 RM’000
(c) LIFE FUND (continued)
Net fair value gain/(loss) of fi nancial assets
at fair value through profi t or loss:
- equity securities 81,766 (84,164)
- corporate debt securities (407) (601)
- unit trusts 8,735 (10,473)
- investment-linked units 126 91
90,220 (95,147 )
Allowance for diminution in value of investments:
Unquoted corporate debt securities (3,656) (10,000)
Revaluation defi cit on property, plant and equipment - (1,763)
Net fair value (loss)/gain on investment properties (18,440) 229
Impairment loss on property, plant and equipment (17,011) -
(35,451 ) (1,534 )
Allowance for doubtful debts on loans (16,742) (1,239)
Gain on disposal of property, plant and equipment 10 4
Reassumed premiums previously ceded (i) - 113,572
Other provisions (see note 40(b)) - (19,602)
Others 8,382 3,273
(8,350 ) 96,008
Other operating income/(expenses) - net 32,597 (26,800 )
(i) Reassumed premiums previously ceded in the life fund is in respect of termination of a treaty agreement as disclosed in note
20 to the fi nancial statements.
(d) INVESTMENT-LINKED FUND
Gain/(loss) on disposal of
Financial assets:
Equity securities
- at fair value through profi t or loss 737 (20,624)
Corporate debt securities
- at fair value through profi t or loss 251 425
Loan stocks (7) -
Unit trusts 166 -
1,147 (20,199 )
Increase/(decrease) in value of investments 42,435 (9,741)
Others (4,737) (3,881)
37,698 (13,622 )
Other operating income/(expenses) - net 38,845 (33,821 )
134

Notes To The Financial Statements
- 31 December 2006 (continued)
28 MANAGEMENT EXPENSES
GROUP
Shareholders’ fund General fund Life fund
2006 2005 2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Staff costs (including
executive directors):
- salaries and bonus 36,504 37,283 36,837 32,921 32,866 29,201
- defi ned contribution
retirement benefi ts 4,310 4,755 7,759 7,553 6,824 5,254
40,814 42,038 44,596 40,474 39,690 34,455
Property, plant and equipment
- depreciation 2,003 2,587 4,112 5,391 14,240 12,100
Amortisation of intangible assets 405 347 553 - 871 -
Amortisation of leases - - - - 62 -
Auditors’ remuneration
- statutory audit 144 102 71 72 106 98
- under provision in
prior fi nancial year 148 17 - 1 - 1
Auditors’ remuneration payable/
paid to other audit fi rms 15 22 32 20 - -
Fees paid to a company in which
certain Directors have an interest 227 318 - - 15 15
Allowance for doubtful debts 1,612 166 267 2,392 - -
Bad debts written off 2,901 33 - - 656 -
Offi ce rental 358 378 3,011 2,690 5,615 4,451
Rental of offi ce equipment 46 114 616 424 850 5
Training expenses 317 307 1,735 1,292 7,351 5,423
Repairs and maintenance 593 112 2,237 2,101 5,008 4,541
EDP expenses 537 48 2,885 2,712 1,287 2,512
Advertising, promotional
and entertainment expenses 2,704 2,560 9,225 9,380 8,633 7,723
Motor vehicle and traveling expenses 4,473 2,885 3,015 2,476 2,374 1,781
Printing and stationery 565 402 2,525 2,915 3,249 2,774
Postage, telephone, telex and fax 810 798 2,008 1,827 2,951 4,076
Management expenses - - 152 207 7,327 5,822
Other expenses 8,453 8,362 6,993 4,154 4,928 5,123
67,125 61,596 84,033 78,528 105,213 90,900
Included in management expenses were emoluments receivable by Directors of the Group during the fi nancial year:
GROUP
Shareholders’ fund General fund Life fun
2006 2005 2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Executive directors:
- salaries 3,631 3,546 396 348 420 372
- bonus 1,187 987 141 55 140 55
- defi ned contribution
retirement benefi ts 708 678 81 80 84 82
- other emoluments 8 8 3 115 2 115
Non-executive directors:
- fees 346 264 201 224 200 223
- other emoluments 92 71 24 16 24 16
5,972 5,554 846 838 870 863
135

Notes To The Financial Statements
- 31 December 2006 (continued)
28 MANAGEMENT EXPENSES (continued)
COMPANY
2006 2005
RM’000 RM’000
Staff costs (including executive directors):
- staff costs 5,750 6,224
- defi ned contribution retirement benefi ts 1,348 1,503
7,098 7,727
Depreciation of property, plant and equipment 451 453
Auditors’ remuneration
- statutory audit 25 25
- under provision in prior fi nancial year 128 5
Fees paid to a company in which certain Directors have an interest 187 258
Offi ce rental payable to a subsidiary company 474 449
Other expenses 5,920 4,084
14,283 13,001
Included in management expenses were emoluments receivable by Directors of the Company during the fi nancial year:
COMPANY
2006 2005
RM’000 RM’000
Executive directors:
- salaries 2,049 1,946
- bonus 1,006 776
- defi ned contribution retirement benefi ts 445 418
Non-executive directors:
- fees 278 207
- other emoluments 58 50
3,836 3,397
The estimated monetary value of benefi ts provided to Directors during the fi nancial year by way of usage of the Group’s and
Company’s assets amounted to RM251,200 (2005: RM177,000) and RM130,600 (2005: 78,700) respectively.
The Directors of the Company in offi ce during the fi nancial year were as follows:
Tunku Tan Sri Abdullah Ibni Almarhum Tuanku Abdul Rahman
Tunku Dato’ Ya’acob bin Tunku Tan Sri Abdullah
Tunku Dato’ Seri Iskandar bin Tunku Tan Sri Abdullah
Major General Lai Chung Wah (Rtd)
Dato’ Iskandar Michael bin Abdullah
Yeo Took Keat
General Dato’ Sri Hj Suleiman bin Mahmud (Rtd)
Datuk Razman Md Hashim bin Che Din Md Hashim (appointed on 01.07.2006)
Datuk Ramlan bin Abdul Rashid (appointed on 07.09.2006)
Muhamad Umar Swift (appointed on 07.09.2006)
Tan Sri Ahmad bin Mohd Don (appointed on 13.10.2006)
Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah (appointed on 10.01.2007)
Tan Sri Dato’ Ir Abu Zarim bin Haji Omar (resigned on 01.07.2006)
136

Notes To The Financial Statements
- 31 December 2006 (continued)
29 FINANCE COSTS
GROUP
Shareholders’ fund
Life fund
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Interest on bonds 3,904 5,670 - -
Interest on term loans 4,630 2,908 - -
Interest on bank overdrafts 2,237 1,281 43 15
Interest on revolving credit facility 69 - - -
Hire purchase interest 52 - - -
Others 480 - - -
11,372 9,859 43 15
COMPANY
2006 2005
RM’000 RM’000
Interest on bonds 3,904 5,670
Interest on term loan 2,250 2,250
Interest on bank overdraft 1,425 654
Interest on revolving credit facility 63 -
Hire purchase interest 31 -
Interest on advances paid to subsidiary companies 52 -
Others 480 -
8,205 8,574
The interest rates charged during the fi nancial year for bonds, term loans and bank overdrafts are disclosed in notes 16, 17 and 18
to the fi nancial statements respectively.
137

Notes To The Financial Statements
- 31 December 2006 (continued)
30 TAXATION
GROUP
General and
Investment-
Shareholders’ funds Life fund linked fund
2006 2005 2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Current tax 4,679 (644) 14,150 11,311 (87) 440
Deferred tax (note 12) 93 (1,072) 3,502 (3,786) 3,427 (726)
Tax expense/(income) 4,772 (1,716 ) 17,652 7,525 3,340 (286 )
Current tax
Current fi nancial year 5,254 (437) 15,663 10,650 1,379 651
Under/(over) accrual
in prior fi nancial years (575) (30) (1,513) 661 (1,466) (211)
Effect of changes in
accounting policies - (177) - - - -
Deferred tax
4,679 (644 ) 14,150 11,311 (87 ) 440
Origination and reversal
of temporary differences (310) 1,090 3,502 (3,465) 3,427 (726)
Under accrual in prior fi nancial years 391 - - - - -
Effect of changes in tax rates on
opening balance of deferred tax 12 - - - - -
Benefi t from previously
unrecognised tax losses - (1,825) - - - -
Effect of prior year adjustment - (337) - (321) - -
93 (1,072 ) 3,502 (3,786 ) 3,427 (726 )
4,772 (1,716 ) 17,652 7,525 3,340 (286 )
COMPANY
2006 2005
RM’000 RM’000
Current tax 3,847 21,800
Deferred tax (note 12) (6,157) (540)
Tax (income)/expense (2,310 ) 21,260
Current tax
Current fi nancial year 3,847 21,800
Deferred tax
Origination and reversal of temporary differences (6,157 ) (540 )
(2,310 ) 21,260
138

Notes To The Financial Statements
- 31 December 2006 (continued)
30 TAXATION (continued)
COMPANY
2006 2005
% %
Numerical reconciliation between the average effective tax rate
and the statutory tax rate:
Malaysian tax rate 28 28
Tax effects of:
- expenses not deductible for tax purposes 85 (34)
- different taxation rates of subsidiary companies (15) (1)
- tax losses not recognised 80 9
- deductible temporary differences not recognised (7) (6)
- recognition of previously unrecognised temporary differences (12) -
- over accrual in prior fi nancial year (6) -
Average effective tax rate 153 (4 )
Numerical reconciliation between the average effective tax rate
and the statutory tax rate:
COMPANY
2006 2005
% %
Malaysian tax rate 28 28
Tax effects of expenses not deductible for tax purposes (26) 2
Tax effects of income not taxable for tax purposes (20) -
Average effective tax rate (18 ) 30
The taxation charge in the income statement of the Group relates to income attributable to the Company and the general and
shareholders’ funds.
The taxation charge on the Group’s life fund is based on the method prescribed under the Income Tax Act, 1967 for life business.
31 DIVIDENDS
GROUP/COMPANY
2006 2005
Gross Amount of Gross Amount of
dividend dividend, dividend dividend,
per share tax exempt per share tax exempt
Sen RM’000 Sen RM’000
Proposed fi nal dividend 2.0 6,087 10.0 15,218
Dividends paid:
Proposed fi nal dividend of prior fi nancial year 10.0 15,218 15.0 22,827
10.0 15,218 15.0 22,827
At the forthcoming Annual General Meeting to be held on 28 June 2007, a fi nal gross tax exempt dividend in respect of the fi nancial
year ended 31 December 2006 of 2 sen per share (2005: 10 sen per share) amounting to RM6,087,000 (2005: RM15,218,000) will be
proposed for shareholders’ approval.
These fi nancial statements do not refl ect this fi nal dividend which will be accrued as a liability in the fi nancial year ending 31
December 2006 when approved by shareholders.
139

Notes To The Financial Statements
- 31 December 2006 (continued)
32 EARNINGS PER SHARE - GROUP
The basic earnings per ordinary share has been calculated by dividing the Group’s net loss for the fi nancial year of RM2,176,000
(2005: net profi t of RM42,619,000) by the weighted average number of ordinary shares of the Company in issue during the fi nancial
year of 304,354,000 shares (2005: 304,354,000 shares). The earnings per share in the previous fi nancial year has been adjusted to take
into consideration the bonus issue during the current fi nancial year as disclosed in note 21 to the fi nancial statements.
The effects on the basic earnings per ordinary share for the fi nancial year ended 31 December 2006 arising from the assumed
conversion of redeemable convertible secured loan stocks, redeemable convertible unsecured loan stocks, irredeemable cumulative
convertible preference shares, irredeemable convertible unsecured loan stocks and warrants of the associated company of the
Group is anti-dilutive. Accordingly, the diluted earnings per ordinary share for the fi nancial year ended 31 December 2006 has not
been presented.
33 NET CLAIMS INCURRED
GENERAL FUND
GROUP
2006
Marine,
Motor Motor Aviation Misce-
Fire vehicles cycles & Transit llaneous Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Gross claims paid less salvage 42,688 170,132 32,143 9,003 37,832 291,798
Reinsurance recoveries (28,161) (29,703) (5,866) (6,140) (9,101) (78,971)
Net claims paid 14,527 140,429 26,277 2,863 28,731 212,827
Net outstanding claims:
At end of fi nancial year 21,690 188,362 50,010 3,909 41,056 305,027
Currency translation differences 55 1,806 - 49 (215) 1,695
At beginning of fi nancial year (17,837) (179,953) (42,453) (5,751) (41,339) (287,333)
Net claims incurred 18,435 150,644 33,834 1,070 28,233 232,216
2005
Gross claims paid less salvage 27,492 176,763 31,458 10,001 29,430 275,144
Reinsurance recoveries (15,016) (31,792) (5,196) (7,529) (8,831) (68,364)
Net claims paid 12,476 144,971 26,262 2,472 20,599 206,780
Net outstanding claims:
At end of fi nancial year 17,837 179,953 42,453 5,751 41,339 287,333
Currency translation differences 72 (1,046) - 65 2,042 1,133
At beginning of fi nancial year (13,155) (195,038) (52,334) (6,139) (45,760) (312,426)
Net claims incurred 17,230 128,840 16,381 2,149 18,220 182,820
140

Notes To The Financial Statements
- 31 December 2006 (continued)
34 INVESTMENT-LINKED FUND
GROUP
2006 2005
RM’000 RM’000
BALANCE SHEET
ASSETS
Financial assets
Investments
- at fair value through profi t or loss (note 7(b)) 440,027 231,562
Loans and receivables (note 8(b)) 11,638 6,984
Tax recoverable 3,330 1,023
Deferred tax assets (note 12) 31 154
Fixed and call deposits (note 37(b)) 78,054 87,297
Cash and bank balances (note 36) 8,915 5,803
LIABILITIES
541,995 332,823
Trade and other payables (note 15(b)) 19,438 9,303
Current tax liabilities 625 541
Deferred tax liabilities (note 12) 3,467 163
23,530 10,007
NET ASSET VALUE OF FUNDS 518,465 322,816
REPRESENTED BY:
UNITHOLDERS’ ACCOUNT
At beginning of fi nancial year 322,816 253,214
Net creation of units 135,256 96,446
Net surplus/(defi cit) for the fi nancial year after taxation 54,366 (21,586)
Foreign exchange reserves (1,218) 43
511,220 328,117
Distribution during the fi nancial year 7,245 (5,301)
At end of fi nancial year 518,465 322,816
INCOME STATEMENT
Investment income (note 25(d)) 18,861 11,949
Other operating income/(expenses) - net (note 27(d)) 38,845 (33,821)
Surplus/(defi cit) before taxation 57,706 (21,872)
Taxation (note 30) (3,340) 286
Net surplus/(defi cit) for the fi nancial year after taxation 54,366 (21,586 )
141

Notes To The Financial Statements
- 31 December 2006 (continued)
35 PROVISION FOR LIFE AGENTS’ RETIREMENT BENEFITS
GROUP
Life fund
2006 2005
RM’000 RM’000
At beginning of fi nancial year 5,001 5,575
Provision for the fi nancial year 393 1,490
Utilised during the fi nancial year (1,484) (2,064)
At end of fi nancial year 3,910 5,001
Payable within 12 months 957 419
Payable after 12 months 2,953 4,582
The amount recognised in the balance sheet is analysed as follows:
3,910 5,001
Present value of funded obligations 18,216 15,240
Fair value of plan assets (18,216) (15,240)
Status of funded plan - -
Present value of unfunded obligations 3,910 5,001
Liability in the balance sheet 3,910 5,001
The expense recognised in the life insurance revenue account under commission and agency expenses may be analysed as
follows:
GROUP
Life fund
2006 2005
RM’000 RM’000
Current service cost 218 1,301
Interest cost 175 189
393 1,490
The actual return on plan asset was RM791,000 (2005: RM1,527,000).
Present value of funded obligations is always equal to the fair value of plan assets of funded retirement benefi t scheme as actual
payment to agents is based on actual fair value of plan assets at the time of retirement. The insurance subsidiary company assumes
that all agents who have served the company for more than 10 years will continue to serve the company until their age of retirement
and eligible for the retirement benefi t.
36 CASH AND CASH EQUIVALENTS
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Cash and bank balances:
- General and Shareholders’ funds 27,165 28,935 972 542
- Life fund 50,203 27,762 - -
- Investment-linked fund (note 34) 8,915 5,803 - -
86,283 62,500 972 542
Bank overdrafts:
- General and Shareholders’ funds (26,002) (14,293) (17,382) (12,579)
60,281 48,207 (16,410) (12,037 )
142
The cash and cash equivalents of the life fund are applicable only to meet such part of the life fund’s liabilities and expenses as are
properly so attributable.

Notes To The Financial Statements
- 31 December 2006 (continued)
37 FIXED AND CALL DEPOSITS
(a) GENERAL AND SHAREHOLDERS’ FUNDS
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Fixed and call deposits with:
Licensed banks 110,317 139,826 1,230 2,385
Licensed fi nance companies - 181 - -
Other corporations 4,913 - - -
115,230 140,007 1,230 2,385
(b) LIFE FUND AND INVESTMENT-LINKED FUND
GROUP
Life fund Investment-linked fund
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Fixed and call deposits with:
Licensed banks 444,912 563,462 40,902 61,558
Licensed fi nance companies - 100 - -
Other corporations 106,126 117,310 37,152 25,739
551,038 680,872 78,054 87,297
38 CASH FLOW SEGMENT INFORMATION
2006
GROUP
General Shareholders’ Life Investmentfunds
fund fund linked fund Total
RM’000 RM’000 RM’000 RM’000 RM’000
Cash fl ows from:
Operating activities (5,795) 85,855 29,589 3,112 112,761
Investing activities (1,512) (49,589) (7,148) - (58,249)
Financing activities - (42,438) - - (42,438)
(7,307 ) (6,172 ) 22,441 3,112 12,074
Net increase/(decrease) in
cash and cash equivalents (7,307) (6,172) 22,441 3,112 12,074
Cash and cash equivalents:
At beginning of fi nancial year 18,224 (3,582) 27,762 5,803 48,207
At end of fi nancial year 10,917 (9,754 ) 50,203 8,915 60,281
143

Notes To The Financial Statements
- 31 December 2006 (continued)
38 CASH FLOW SEGMENT INFORMATION (continued)
2005
GROUP
General Shareholders’ Life Investmentfunds
fund fund linked fund Total
RM’000 RM’000 RM’000 RM’000 RM’000
Cash fl ows from:
Operating activities 18,446 6,230 (11,649) (217) 12,810
Investing activities (2,368) (15,757) (3,598) - (21,723)
Financing activities - (5,672) - - (5,672)
16,078 (15,199 ) (15,247 ) (217 ) (14,585 )
Net increase/(decrease) in
cash and cash equivalents 16,078 (15,199) (15,247) (217) (14,585)
Cash and cash equivalents:
At beginning of fi nancial year 2,146 11,617 43,009 6,020 62,792
At end of fi nancial year 18,224 (3,582 ) 27,762 5,803 48,207
39 CAPITAL AND OTHER COMMITMENTS
GROUP
General and
Shareholders’ funds
Life fund
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Authorised and contracted for:
- property, plant and equipment 3,538 6,772 - -
- acquisition of investment properties 591 450 57,734 35,415
4,129 7,222 57,734 35,415
Authorised but not contracted for:
- acquisition of investment properties - - 4,171 59,000
COMPANY
2006 2005
RM’000 RM’000
Authorised and contracted for:
- subscription of shares in a Takaful Insurance subsidiary 75,000 -
40 CONTINGENT LIABILITIES
144
In the previous fi nancial year, Meridian Asset Management Sdn Bhd (“MAMS”) had commenced a legal proceeding against one of
its custodian of its fund under management and a legal proceeding against its former employee and other parties related to him
to recover the loss of investment moneys of its clients, one of whom is Malaysian Assurance Alliance Berhad (“MAA”), amounting to
RM27.6 million placed with the custodian. MAA has also commenced legal proceedings against the custodian for negligence to
recover its loss.
The parties to the legal proceedings have fi led various applications to the High Court to dispose of the cases. In the legal proceedings
taken by MAA against the custodian, a Third Party Notice was fi led and served on MAA to bring MAMS as a party to the legal
proceedings. The High Court has allowed the terms of the summons for directions of the third party proceedings and has fi xed 14
May 2007 for case management. In the legal proceedings taken by MAMS against the custodian, the High Court has adjourned
the matter for mention on 13 June 2007 and pending resolution of the issue of consolidation. The legal proceeding taken by MAMS
against the ex-staff and other parties is pending case management.
The directors of MAMS, supported by legal advice, are of the opinion that MAMS has a strong case against the custodian and the
case against the ex-staff and other parties. However, for prudence purposes, MAA had made a full allowance of RM19.6 million in
the fi nancial statements for the year ended 31 December 2005. This allowance remains in the current fi nancial year.

Notes To The Financial Statements
- 31 December 2006 (continued)
41 NON-CANCELLABLE OPERATING LEASE COMMITMENTS
2006
GROUP
General and
Shareholders’ fund
Life fund
Future Future Future Future
minimum minimum minimum minimum
lease sublease lease sublease
payments receipts payments receipts
RM’000 RM’000 RM’000 RM’000
Not later than 1 year 1,553 875 5,247 2,228
Later than 1 year and not later than 5 years 1,463 875 5,247 2,228
2005
3,016 1,750 10,494 4,456
Not later than 1 year 1,553 875 5,247 2,228
Later than 1 year and not later than 5 years 3,106 1,750 10,494 4,456
4,659 2,625 15,741 6,684
42 SIGNIFICANT RELATED PARTY DISCLOSURES
Related parties and relationships
The subsidiary and associated companies of the Company are disclosed in notes 10 and 11 to the fi nancial statements
respectively.
The other related parties of, and their relationships with the Group and the Company, are as follows:
Related party
Iternum Melewar Sdn Bhd
Melewar Equities Sdn Bhd
Trace Management Services Sdn Bhd
Melewar Group Berhad
Melewar Industrial Group Berhad
Mycron Steel Berhad
Central Market Development Sdn Bhd
Sistem Sewa Kereta Malaysia Sdn Bhd
Mitra Malaysia Sdn Bhd
Melewar Integrated Engineering Sdn Bhd
Malaysian Merchant Marine Berhad
Melewar Apex Sdn Bhd
Mithril Berhad
Mithril Saferay Sdn Bhd
Mithril Marketing Sdn Bhd
Tajo Berhad
Relationship
Substantial shareholder of the Company
Substantial shareholder of the Company
Company controlled by certain Directors of the Company
Company controlled by certain Directors of the Company
Company controlled by certain Directors of the Company
Company controlled by certain Directors of the Company
Company controlled by certain Directors of the Company
Company controlled by certain Directors of the Company
Company controlled by a Director of the Company
Company controlled by a Director of the Company
Company controlled by a Director of the Company
Company controlled by person connected to certain
Directors of the Company
An associated company of the Group
A subsidiary company of an associated company of the Group
A subsidiary company of an associated company of the Group
A subsidiary company of an associated company of the Group
145

Notes To The Financial Statements
- 31 December 2006 (continued)
42 SIGNIFICANT RELATED PARTY DISCLOSURES (continued)
Related parties and relationships (continued)
Related party
MAA-Medicare Kidney Charity Fund
The Budimas Charitable Foundation
Masterconsult Sdn Bhd
Relationship
Trust fund in which certain Directors of the Company are trustees
Trust fund in which a Director of the Company is trustee
Company controlled by a Director of the Company
During the fi nancial year, the Group and the Company undertook various transactions with its subsidiary companies, associated
companies and other companies deemed related parties as disclosed above.
Significant related party transactions
The signifi cant related party transactions during the fi nancial year are as follows:
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Transactions with subsidiary companies:
Interest income from advances to subsidiary companies - - 6,984 7,929
Gross dividend income from subsidiary companies - - 48,900 82,500
Management fee income from subsidiary companies - - 2,868 2,680
*Rental expense payable to a subsidiary company - - (474) (449)
*Rental income receivable from related parties:
Trace Management Services Sdn Bhd 87 70 - -
Melewar Group Berhad 72 33 - -
Melewar Equities Sdn Bhd 35 84 - -
Sistem Sewa Kereta Malaysia Sdn Bhd - 120 - -
Melewar Apex Sdn Bhd 45 175 - -
Melewar Integrated Engineering Sdn Bhd 261 116 - -
Mithril Berhad 158 170 - -
The Budimas Charitable Foundation 62 52 - -
MAA-Medicare Kidney Charity Fund 78 78 - -
Melewar Industrial Group Berhad 195 - - -
*Other transactions with related parties:
Rental expense payable to Central Market
Development Sdn Bhd (61) (61) - -
Purchase of air tickets and travel packages
from Mitra Malaysia Sdn Bhd (3,374) (3,739) (169) (87)
Company secretarial and related fees payable
to Trace Management Services Sdn Bhd (242) (333) (187) (258)
Rental expenses payable to Mithril Berhad (6,800) (6,800) - -
Consultancy advisory fee receivable
from Melewar Industrial Group Berhad 18 95 - -
*Interest income receivable from related parties:
Tajo Berhad - 2,064 - -
Mithril Saferay Sdn Bhd 10 - - -
Mithril Marketing Sdn Bhd 1,200 - - -
Mithril Berhad 4 - - -
Transactions with associated companies:
Management fee income - - 350 480
System support and maintenance fee income 6 73 - -
*Security services fee receivable from related parties:
Mycron Steel Berhad 124 124 - -
Melewar Industrial Group Berhad 135 127 - -
*Related party transactions on terms and conditions equivalent to those in arm’s length transactions with unrelated parties.
146

Notes To The Financial Statements
- 31 December 2006 (continued)
42 SIGNIFICANT RELATED PARTY DISCLOSURES (continued)
Related party receivables/payables
The balances with related companies at the fi nancial year end are disclosed in note 8 and 15 to the fi nancial statements. Other
signifi cant balances with other related parties at the fi nancial year end are as below:
Investments in related parties’, i.e Melewar Industrial Group Berhad and Mycron Steel Berhad, quoted shares (included in note 7 to
the fi nancial statements):
General and
Shareholders’ funds
Life fund
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
At carrying value:
- Quoted equity securities 2,466 1,015 17,392 23,627
- Quoted corporate debts securities 9,281 8,679 25,945 24,875
At end of fi nancial year 11,747 9,694 43,337 48,502
In addition, directors and key management personnel received remuneration for services rendered during the fi nancial year. The
total compensation paid to the Group and the Company’s directors and key management personnel as well as fees paid to
directors were as follows:
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Salaries and other short-term employee benefi ts 10,363 9,564 3,521 3,106
Defi ned contribution retirement benefi ts 2,171 2,304 1,109 869
12,534 11,868 4,630 3,975
The fi nancial year end balances with key management personnel were as follows:
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Amount receivable from mortgage loans 2,093 2,418 355 391
Amount payable to a director 145 145 - -
The amount receivable from mortgage loans are secured against the properties pledged with fi xed repayment terms and bearing
interest at the rates ranging from 5% to 8.5% per annum (2005: 5% to 8.5% per annum).
The amount payable to a director is unsecured, interest free and with no fi xed terms of repayment.
147

Notes To The Financial Statements
- 31 December 2006 (continued)
43 PRIOR YEAR ADJUSTMENTS
During the fi nancial year, the Group and Company have accounted for certain changes in accounting policies and other
accounting matters retrospectively as set out below:
(a) Property, plant & equipment
During the current fi nancial year, the Group has restated as prior year adjustment, balances relating to investment properties and
property, plant and equipment. The Group had reassessed their judgment over the defi nition and identifi cation of investment
properties. This assessment resulted in the Group reclassifying RM74,775,000 and RM232,353,000 from investment properties
to property, plant and equipment for the general insurance and shareholders’ funds and life insurance fund respectively.
Following the reclassifi cation, the Group adopted the revaluation model on land and buildings classifi ed as property, plant and
equipment and recognise an annual depreciation charge to the income statement and/or revenue accounts.
These changes are applied retrospectively and consequently, the fi nancial statements for the fi nancial year ended 31 December
2005 have been restated to incorporate these changes.
The effects of these changes on the prior fi nancial year’s fi nancial statements may be found in notes 4 and 6 to the fi nancial
statements.
(b) Investment Property
During the fi nancial year, the Group effected as a prior year adjustment of RM52,900,000 (net of tax) in respect of an overstatement
of fair value of an investment property held in the life insurance fund by restating the fair value of investment properties as at 1
January 2005 with a corresponding restatement to the life policy holders’ fund as at 1 January 2005.
The prior year adjustment arose from an error to adjust the fair value of the investment property to the buy-back consideration
pursuant to a put option granted in the sale and purchase agreement.
The above changes have no impact to the Company’s stand-alone fi nancial statements. The effects of the above changes in
accounting policies on the Group’s fi nancial statements are summarised as follows:
GROUP
GENERAL AND SHAREHOLDERS’ FUND
At 1 January 2005
Effects of
changes in
accounting
As policies/
previously prior year As
reported adjustments restated
Note RM’000 RM’000 RM’000
Property, plant and equipment (a) 23,152 74,775 97,927
Investment properties (a) 130,436 (74,775) 55,661
For the fi nancial year ended 31 December 2005
-
Profi t for the fi nancial year (a) 44,170 (1,321 ) 42,849
Comprising the following adjustments:
- Taxation (a) 1,202 514 1,716
- Surplus transferred from:
General insurance (a) 12,143 (1,204) 10,939
Life insurance (a) 20,857 (631) 20,226
(1,321 )
Earnings per share (sen) (a) 14.5 (0.5 ) 14.0
148

Notes To The Financial Statements
- 31 December 2006 (continued)
43 PRIOR YEAR ADJUSTMENTS (continued)
Effects of
changes in
accounting
As policies/
previously prior year As
reported adjustments restated
Note RM’000 RM’000 RM’000
GROUP
GENERAL AND SHAREHOLDERS’ FUND (continued)
At 31 December 2005
Retained earnings (a) (226,836) 1,321 (225,515)
Revaluation reserve (a) - (867) (867)
Comprising the following adjustments:
- Property, plant and equipment (a) 22,785 74,775 97,560
- Investment properties (a) 130,183 (74,775) 55,408
- Loans and receivables 355,013 (632) 354,381
- Tax recoverable (a) 18,784 178 18,962
LIFE INSURANCE FUND
At 1 January 2005
Property, plant and equipment (a) 37,103 232,353 269,456
Investment properties (a), (b) 944,560 (289,853) 654,707
Life policyholders’ funds (b) (673,707) 52,900 (620,807)
Deferred tax (a), (b) 1,607 4,600 6,207
454
(454 )
-
At 31 December 2005
Life policyholders’ funds (a) (4,930,032) 55,957 (4,874,075)
Revaluation reserve (a) - (4,598) (4,598)
51,359
Comprising the following adjustments:
- Property, plant and equipment (a) 32,105 232,088 264,193
- Investment properties (a) 961,493 (288,599) 672,894
- Deferred tax assets (a) 9,173 4,521 13,694
- Trade and other payables (a) (90,538) 631 (89,907)
(51,359 )
149

Notes To The Financial Statements
- 31 December 2006 (continued)
44 SEGMENTAL INFORMATION
(a) Business segments
The Group operates in three main business segments:
• Life insurance - underwriting life insurance business, including investment-linked business
• General insurance - underwriting all classes of general insurance business
• Unit trust fund management - management of unit trust funds
Other operations of the Group mainly comprise investment holding, hire purchase, leasing and other credit activities, unit trust,
property management and investment advising, security and consultancy services, none of which are of a signifi cant size to be
reported separately.
Intersegment sales comprise property management, fund management, security and consultancy services provided to the
insurance business segments on an arms-length basis.
2006
Operating revenue
Life Insurance
Shareholders’
Non- General Unit trust fund
Investment investment insurance fund and other
-linked fund -linked fund fund management operations Eliminations Group
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
External revenue 237,658 1,506,506 476,557 22,865 40,299 - 2,283,885
Inter-segment sales - 2,967 125 - 18,670 (21,762) -
Total operating revenue 237,658 1,509,473 476,682 22,865 58,969 (21,762 ) 2,283,885
Results
Segment results 54,366 8,180 (1,520) 2,792 (11,855) 2,896 54,859
Transfer to life reserve - (37,524) - - - - (37,524)
Profi t/(loss) from operations 54,366 (29,344 ) (1,520 ) 2,792 (11,855 ) 2,896 17,335
Finance costs (11,372)
Share of loss of associated
companies (2,853)
Taxation (4,772)
Loss for the fi nancial year (1,662 )
Other information
Segment assets 541,995 5,471,880 724,986 27,656 340,855 6,515 7,113,887
Investments in associated
companies 53,339
Total assets 7,167,226
Segment liabilities/total liabilities 23,530 6,013,590 595,411 7,088 156,898 - 6,796,517
Capital expenditure - 7,288 1,733 534 6,372 - 15,927
Depreciation of property, plant
and equipment - 14,240 4,112 277 1,726 - 20,355
150

Notes To The Financial Statements
- 31 December 2006 (continued)
44 SEGMENTAL INFORMATION (continued)
(a) Business segments (continued)
2005
Operating revenue
Life Insurance
Shareholders’
Non- General Unit trust fund
Investment investment insurance fund and other
-linked fund -linked fund fund management operations Eliminations Group
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
External revenue 154,625 1,510,094 483,233 20,174 37,294 - 2,205,420
Inter-segment sales - 2,822 143 - 16,083 (19,048) -
Total operating revenue 154,625 1,512,916 483,376 20,174 53,377 (19,048 ) 2,205,420
Results
Segment results (21,586) (62,652) 3,563 653 33,179 1,432 (45,411)
Transfer from life reserve - 97,334 - - - - 97,334
Profi t/(loss) from operations (21,586 ) 34,682 3,563 653 33,179 1,432 51,923
Finance costs (9,859)
Share of loss of associated
companies (931)
Taxation 1,716
Profi t for the fi nancial year 42,849
Other information
Segment assets 332,823 5,092,856 689,212 26,402 376,983 18,198 6,536,474
Investments in associated
companies 14,029
Total assets 6,550,503
Segment liabilities/total liabilities 10,007 5,424,796 553,427 6,537 162,595 - 6,157,362
Capital expenditure - 3,971 3,303 658 4,271 - 12,203
Depreciation of property, plant
and equipment - 12,100 5,391 425 2,162 - 20,078
(b) Geographical segments
The Group operates mainly in Malaysia, Indonesia and Philippines. In determining the geographical segments of the Group,
revenue is based on the geographical location of customers. Total assets and capital expenditure are based on the geographical
location of assets.
Operating revenue Total assets Capital expenditure
2006 2005 2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Malaysia 2,203,860 2,146,181 7,095,221 6,497,943 15,626 11,875
Indonesia 79,569 58,955 63,189 44,087 285 320
Philippines 456 284 8,816 8,473 16 8
2,283,885 2,205,420 7,167,226 6,550,503 15,927 12,203
151

Notes To The Financial Statements
- 31 December 2006 (continued)
45 MANAGEMENT OF FINANCIAL RISK
Financial risk management objectives and policies
The Group’s activities expose it to a variety of fi nancial risks, including underwriting risk, credit risk, settlement risk, market risk, equity
price risk, liquidity risk, foreign currency exchange risk and operational risk.
The Group carried out its fi nancial risk management through internal control systems, standard operating procedures, investment
strategies and adherence to all rules and regulations as stipulated by the Guidelines for Investments issued by Bank Negara Malaysia,
Labuan Offshore Financial Services Authority and the Ministry of Finance, Indonesia, for its local and overseas insurance subsidiary
companies.
The Board regularly reviews these risks and approves policies for managing each of these risks.
Underwriting risk
For the Group’s insurance subsidiary companies, underwriting risk represents the inherent risk in insurance of incurring higher claims
costs than expected. This is due to the random nature of claims, changes in legal or economic conditions or behavioural patterns
affecting the frequency and severity of claims.
The Group seeks to manage underwriting risks through the following means:
• Maintaining a measure of conservatism with respect to the adequacy of insurance premium rate levels and provisions with
respect to insurance liabilities;
• Writing a balanced mix and spread of business, geographically and between classes of business;
• Observing underwriting guidelines, which cover exclusions, loadings and cover limits;
• Transferring risk through a program of reinsurance that seeks to limit the exposure to any one risk or life as well as protect the
overall retained portfolio from a general deterioration in claims as well as catastrophic events.
Credit risk
Credit risk is the risk of loss from the default by a debtor or counter party. Credit risks arise in the Group’s lending and investment
activities.
In lending and investment activities, the Group undertakes credit analysis whereby the credit standing of borrowers, structure of
loans and the general risk entered into are assessed and evaluated.
Minimum credit quality applies to investments carried out by the Group in private debt securities with a minimum rating of BBB-/BBB3
(at date of investment) accorded by reputable rating agencies. The Group however intends to maintain a minimum A/A2 portfolio
average under current returns objectives. The Group does not solely depend on the ratings provided but as in all credit applications,
reviews the credit based on publicly available information together with in-house analysis based on information provided by the
borrowers/issuers, peer group comparisons, industry comparisons and other quantitative tools.
Debtor recoverability and risk concentration monitoring, including on-going monitoring of the fi nancial standing of these debtors or
counter parties, are part of credit risk management of the Group to ensure that the Group is exposed to minimal credit risk. For the
Group’s insurance subsidiary companies, allowance for doubtful debts is made on those loans (or part of remaining amounts) where
the level of required security has been impaired.
152

Notes To The Financial Statements
- 31 December 2006 (continued)
45 MANAGEMENT OF FINANCIAL RISK (continued)
Credit risk (continued)
The Group’s credit risk exposure in the insurance subsidiary companies is analysed as follows:
Carrying amount
Analysed by rating
2006 2005
Quoted Unquoted Quoted Unquoted
corporate corporate corporate corporate
debt debt debt debt
securities securities Loans securities securities Loans
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Government Guaranteed - 59,765 - - 26,619 -
AAA - 155,120 - - 157,738 -
AA - 401,955 - - 372,830 -
A - 564,740 - - 675,592 -
BBB 35,226 178,562 - 32,728 137,420 -
BB of lower - 32,000 - - 31,909 -
Non-investment grade 691 9,642 1,114,543 3,367 6,572 942,969
35,917 1,401,784 1,114,543 36,095 1,408,680 942,969
The rating categories are based on the gradings of reputable rating agencies.
Carrying amount
Analysed by industry
2006 2005
Quoted Unquoted Quoted Unquoted
corporate corporate corporate corporate
debt debt debt debt
securities securities Loans securities securities Loans
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Agriculture, forestry, fi sheries - 138,644 39,942 - 159,468 102
Construction - 126,589 - - 20,291 -
Finance - 191,575 171,065 - 222,304 156,551
Industrial/Manufacturing 35,917 147,613 - 36,095 131,011 -
Infrastructure - 327,961 - - 283,271 -
Power - 215,048 - - 232,030 -
Property - 114,357 512,474 - 184,968 469,643
Trading/Services - 139,997 57,409 - 175,337 57,125
Others - - 333,653 - - 259,548
35,917 1,401,784 1,114,543 36,095 1,408,680 942,969
The Group’s insurance subsidiary company encountered occurrence of rating default events for three unquoted corporate debt
securities. The renegotiated terms in one of the securities have been approved by the Securities Commission and are pending
the formal restructure of the parent company. The other two securities have been called an event of default in 2005 and 2006
respectively. In one case, the Bondholders have progressed into a full litigation suit against its issuer and others for alleged breach
of contract and/or negligence while bondholders of the other default securities were prevented from initiating the necessary legal
action under a restraining order which will expire in July 2007. The repayment capability of the fi rst restructured security hinges on
the group restructure exercise that the issuer is undergoing while the latter cases will rely on the recovery or claim from the outcome
of the civil suits.
Settlement risk
Settlement risk arises when there is an exchange of value for the same or different value dates and is not verifi ed or expected until
the Group has paid or delivered its obligation to the trade. All transactions currently entered into are mainly with approved counter
parties for settlement methods i.e. RENTAS System Intraday Credit Facility that minimises the risks.
153

Notes To The Financial Statements
- 31 December 2006 (continued)
45 MANAGEMENT OF FINANCIAL RISK (continued)
Market risk
Market risk is the risk of loss due to adverse changes or volatility of prices in fi nancial markets on the Group’s investments.
Interest rate risk is the market risk due to movements in interest rates and may affect valuation and reinvestment issues to the Group.
The Investment Committee actively monitors such developments as well as discusses changes in maturity profi les of assets and
liabilities to minimise overall mismatch.
Interest rate exposure also arises from the Group’s borrowings. The Group fi nances its operations through a mixture of retained profi ts
and bank borrowings. Borrowings are managed through the use of fi xed and fl oating rate debts.
The following table provides information about fi nancial assets and fi nancial liabilities, showing the weighted average effective
interest rate and the contractual maturing date for each class of interest-bearing fi nancial instrument in the balance sheet.
2006
Financial assets
Financial assets at fair value through
profi t or loss:
GROUP
Interest-bearing/contractual
maturity date
Weighted
Non- More Total average
interest Up to 1 to 5 than carrying effective
bearing 1 year years 5 years amount interest rate
RM’000 RM’000 RM’000 RM’000 RM’000 %
MGS/ treasury bills/BNM papers - - 86,119 - 86,119 3.88
Cagamas papers - - 10,153 - 10,153 3.56
Equity securities
- quoted 857,689 - - - 857,689
- unquoted 3,788 - - - 3,788
Corporate debt securities
- quoted 691 - 12,131 23,095 35,917 7.04
- unquoted - 37,468 86,292 11,892 135,652 6.64
Unit trusts and investment-linked units
- quoted 23,402 - - - 23,402
- unquoted 44,076 - - - 44,076
Financial assets at available-for-sale:
929,646 37,468 194,695 34,987 1,196,796
MGS/treasury bills/BNM papers - 30,682 793,336 - 824,018 3.88
Cagamas papers - 59,993 - - 59,993 3.66
Corporate debt securities
- Unquoted 507 197,864 590,162 49,642 838,175 6.64
Financial assets at held to maturity:
507 288,539 1,383,498 49,642 1,722,186
MGS/treasury bills/BNM papers - 45,863 61,441 - 107,304 3.88
Corporate debt securities
- unquoted - 40,902 37,541 349,514 427,957 6.64
- 86,765 98,982 349,514 535,261
Loans:
Policy loans - 273,658 - - 273,658 7.57
Mortgage loans - 423,566 88,222 11,159 522,947 10.56
Other secured loans - 286,252 31,362 107 317,721 11.09
Unsecured loans - 162 55 - 217 4.36
- 983,638 119,639 11,266 1,114,543
154

Notes To The Financial Statements
- 31 December 2006 (continued)
45 MANAGEMENT OF FINANCIAL RISK (continued)
Market risk (continued)
2006 (continued)
Financial assets (continued)
GROUP
Interest-bearing/contractual
maturity date
Weighted
Non- More Total average
interest Up to 1 to 5 than carrying effective
bearing 1 year years 5 years amount interest rate
RM’000 RM’000 RM’000 RM’000 RM’000 %
Other receivables:
Income due and accrued 45,285 - - - 45,285
Lease, hire-purchase
and other loan receivables - 135,939 48,198 4,299 188,436 6.14
Others 150,841 - - - 150,841
196,126 135,939 48,198 4,299 384,562
Fixed and call deposits - 678,966 65,356 - 744,322 3.33
Cash and bank balances 86,283
Other fi nancial assets 113,834
Total fi nancial assets 5,897,787
Other assets:
Property, plant and equipment 378,847
Investment properties 734,937
Intangible assets 11,524
Associated companies 53,339
Tax recoverable 53,267
Deferred tax assets 17,226
Other receivables 20,299
Total assets 7,167,226
Financial liabilities
Bonds - unsecured - 30,000 - - 30,000 7.96
Term loans - 39,935 30,000 - 69,935 7.50
Bank overdrafts - unsecured - 26,002 - - 26,002 8.20
Other payables 1,103,011 391 1,360 - 1,104,762
1,103,011 96,328 31,360 - 1,230,699
Other fi nancial liabilities 5,537,485
Total fi nancial liabilities 6,768,184
Other liabilities:
Current tax liabilities 19,028
Deferred tax liabilities 9,305
Total liabilities 6,796,517
* Disclosure information for fi nancial assets and liabilities that relate to rights and obligations arising under employee benefi ts,
insurance contracts and leases are not shown as they are excluded from the scope of FRS Standard 132 - Financial Instruments:
Disclosure and Presentation.
155

Notes To The Financial Statements
- 31 December 2006 (continued)
45 MANAGEMENT OF FINANCIAL RISK (continued)
Market risk (continued)
2005
Financial assets
Financial assets at fair value through
profi t or loss :
GROUP
Interest-bearing/contractual
maturity date
Weighted
Non- More Total average
interest Up to 1 to 5 than carrying effective
bearing 1 year years 5 years amount interest rate
RM’000 RM’000 RM’000 RM’000 RM’000 %
Equity securities
- quoted 800,073 - - - 800,073
- unquoted 3,370 - - - 3,370
Corporate debt securities
- quoted 3,367 - 11,006 21,722 36,095 7.02
- unquoted - 5,304 163,793 23,903 193,000 6.59
Unit trusts and investment-linked units
- quoted 13,505 - - - 13,505
- unquoted 143,054 - - - 143,054
Financial assets at available-for-sale:
963,369 5,304 174,799 45,625 1,189,097
Equity securities
- unquoted 502 - - - 502
MGS/treasury bills/BNM papers - 180,343 173,454 - 353,797 3.25
Cagamas papers - 120,200 60,074 - 180,274 3.55
Corporate debt securities
- Unquoted - 158,450 636,472 63,310 858,232 6.59
Financial assets at held to maturity:
502 458,993 870,000 63,310 1,392,805
Corporate debt securities
- unquoted - 38,204 21,500 297,744 357,448 6.59
Loans:
Policy loans - 244,123 - - 244,123 7.57
Mortgage loans - 236,717 123,598 24,581 384,896 10.53
Other secured loans - 276,259 37,365 56 313,680 11.04
Unsecured loans - 202 68 - 270 4.24
- 757,301 161,031 24,637 942,969
Other receivables:
Income due and accrued 40,826 - - - 40,826
Lease, hire-purchase
and other loan receivables - 170,353 11,488 6,635 188,476 5.65
Others 169,301 - - - 169,301
210,127 170,353 11,488 6,635 398,603
Fixed and call deposits - 842,745 - 65,431 908,176 3.03
156

Notes To The Financial Statements
- 31 December 2006 (continued)
45 MANAGEMENT OF FINANCIAL RISK (continued)
Market risk (continued)
2005 (continued)
Financial assets (continued)
GROUP
Interest-bearing/contractual
maturity date
Weighted
Non- More Total average
interest Up to 1 to 5 than carrying effective
bearing 1 year years 5 years amount interest rate
RM’000 RM’000 RM’000 RM’000 RM’000 %
Cash and bank balances 62,500
Other fi nancial assets 128,014
Total fi nancial assets 5,379,612
Other assets:
Property, plant and equipment 361,753
Investment properties 728,302
Intangible assets 6,189
Associated companies 14,029
Tax recoverable 30,979
Deferred tax assets 23,445
Other receivables 6,194
Total assets 6,550,503
Financial liabilities
Bonds - unsecured - 30,000 30,000 - 60,000 7.90
Term loans - 37,155 30,000 - 67,155 7.50
Bank overdrafts - unsecured - 14,293 - - 14,293 7.02
Other payables 160,421 18 62 - 160,501
160,421 81,466 60,062 - 301,949
Other fi nancial liabilities 5,830,738
Total fi nancial liabilities 6,132,687
Other liabilities:
Current tax liabilities 10,107
Deferred tax liabilities 9,069
Other payables 5,499
Total liabilities 6,157,362
* Disclosure information for fi nancial assets and liabilities that relate to rights and obligations arising under employee benefi ts,
insurance contracts and leases are not shown as they are excluded from the scope of FRS Standard 132 - Financial Instruments:
Disclosure and Presentation.
157

Notes To The Financial Statements
- 31 December 2006 (continued)
45 MANAGEMENT OF FINANCIAL RISK (continued)
Market risk (continued)
2006
Financial assets
COMPANY
Interest-bearing/contractual
maturity date
Weighted
Non- More Total average
interest Up to 1 to 5 than carrying effective
bearing 1 year years 5 years amount interest rate
RM’000 RM’000 RM’000 RM’000 RM’000 %
Financial assets at fair value through
profi t or loss:
Quoted equity securities
of corporations 11,610 - - - 11,610
Loans:
Mortgage loans - 67 417 151 635 6.04
Unsecured loans - 13 - - 13 5.00
- 80 417 151 648
Other receivables:
Amounts due from
subsidiary companies 65,828 64,863 - - 130,691 6.79
Income due and accrued 1 - - - 1
65,829 64,863 130,692
Fixed and call deposits - 1,230 - - 1,230 2.84
Cash and bank balances 972
Total fi nancial assets 145,152
Other assets:
Property, plant and equipment 2,825
Investment in subsidiary and associated companies 260,669
Tax recoverable 4,255
Deferred tax assets 6,847
Others receivables 5,506
Total assets 425,254
Financial liabilities
Bonds – unsecured - 30,000 - - 30,000 7.96
Term loans - unsecured - - 30,000 - 30,000 7.50
Bank overdraft - unsecured - 17,382 - - 17,382 8.20
- 47,382 30,000 - 77,382
Other liabilities:
Others payables 2,076
Total liabilities 79,458
158

Notes To The Financial Statements
- 31 December 2006 (continued)
45 MANAGEMENT OF FINANCIAL RISK (continued)
Market risk (continued)
2005
Financial assets
COMPANY
Interest-bearing/contractual
maturity date
Weighted
Non- More Total average
interest Up to 1 to 5 than carrying effective
bearing 1 year years 5 years amount interest rate
RM’000 RM’000 RM’000 RM’000 RM’000 %
Financial assets at fair value through
profi t or loss:
Quoted equity securities
of corporations 10,879 - - - 10,879
Loans:
Mortgage loans - 63 368 319 750 5.67
Unsecured loans - 1 - - 1 6.50
- 64 368 319 751
Other receivables:
Amounts due from
subsidiary companies 37,469 107,345 - - 144,814 7.41
Fixed and call deposits - 2,385 - - 2,385 2.35
Cash and bank balances 542
Total fi nancial assets 159,371
Other assets:
Property, plant and equipment 2,029
Investment in subsidiary and associated companies 283,420
Tax recoverable 1,792
Deferred tax assets 690
Others receivables 1,282
Total assets 448,584
Financial liabilities
Bonds – unsecured - 30,000 30,000 - 60,000 7.90
Term loans - unsecured - - 30,000 - 30,000 7.50
Bank overdraft - unsecured - 12,579 - - 12,579 7.02
- 42,579 60,000 - 102,579
Other liabilities:
Others payables 458
Total liabilities 103,037
159

Notes To The Financial Statements
- 31 December 2006 (continued)
45 MANAGEMENT OF FINANCIAL RISK (continued)
Equity price risk
The equity investment portfolio of the Group is exposed to movements in equity markets. The Group monitors its equity price risk
through regular stress testing. The Group uses historical stock betas, index levels and equity prices, and estimates the volatility and
correlation of each of these share prices and index levels to calculate the gain or loss that could occur over a defi ned period of
time, given a certain index level.
The Group uses derivative fi nancial instruments (index futures contracts) as a means of hedging against the impact of market
movements on the value of assets in the portfolio so as to reduce and eliminate risks. The Group’s policy is to trade in derivatives
only to hedge existing fi nancial market risk and not for the purpose of speculation.
In respect of the risks associated with the use of derivative fi nancial instruments, price risk is controlled through the setting of exposure
limits, which are subject to detailed monitoring and review.
Liquidity risk
Liquidity risk is the risk that the Group is unable to meet its fi nancial obligations when due. To ensure and avoid such occurrences,
an adequate cushion in the form of cash and very liquid investments are always maintained. The Group also ensures the availability
of funding through an adequate amount of committed credit facilities. The Group monitors on a weekly basis all known obligations
outstanding together with unplanned obligation reserve (as projected by the actuary) for the insurance subsidiary companies, to
monitor mismatches in the investment portfolio.
Foreign currency risk
The Group has overseas subsidiary and associated companies that operate in Indonesia, British Virgin Islands, Philippines and
Thailand whose revenue and expenses are denominated exclusively in Indonesian Rupiah, United States Dollar, Peso and Thai
Baht respectively. It also has subsidiary companies that operate in Labuan whose revenue and expenses are denominated mainly
in United States Dollar. In order to protect the Group’s exposure to the movements in the Ringgit Malaysia/Indonesian Rupiah,
Ringgit Malaysia/Peso and Ringgit Malaysia/Thai Baht exchange rates, the Group fi nances its net investments in the subsidiary and
associated companies in Indonesia, Philippines and Thailand by means of United States Dollar denominated funds.
The Group also has transactional currency exposures entered into by subsidiary companies, mainly in United States Dollar.
Operational risk
Operational risk includes risks that arise from internal processes of an organisation. These may result from inadequacies or failures
in processes, controls or project due to fraud, unauthorised activities, error, omission, ineffi ciency, system failure or from external
event. Operational risk is less direct than credit and market risks, but managing them is critical, particularly in a rapidly changing
environment with increasing transaction volumes. In order to reduce or mitigate these risks, the Group has comprehensive operating
policies and procedures manuals which have been approved by the Board of Directors. Furthermore, the Group has established a
Compliance Department (which included a Risk Management Unit) and Internal Audit Department to review and check the current
procedures adhere to all rules and regulations and the procedures manuals.
Fair values
The carrying amounts of the fi nancial assets and liabilities of the Group and the Company as at the balance sheet date approximate
their fair values, except as set out below:
GROUP
COMPANY
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Amounts due from subsidiary companies - - 130,691 144,814
Amounts due from related companies 6,136 6,955 - -
It is not practicable to determine the fair values of amounts due from subsidiary and related companies because these balances
have no fi xed terms of repayment and are repayable on demand.
160

Notes To The Financial Statements
- 31 December 2006 (continued)
46 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
(a) The Company announced on 29 September 2004 the corporate proposal on renounceable rights issue of up to 152,177,000 New
Irredeemable Preference Shares of RM1each (“IPS”) (“Rights IPS”) together with up to 152,177,000 free detachable Ordinary
Shares of RM1 each (“Ordinary Shares”) (“Bonus Shares”) and up to 152,177,000 free detachable Warrants (“Warrants”) on the
basis of one (1) Rights IPS with one (1) free detachable Bonus Share and one (1) free detachable Warrant for every one (1)
existing Ordinary Share held in the Company at an entitlement date to be determined later (“Rights Issue of IPS”). The Rights Issue
of IPS was approved by the shareholders of the Company at the Extraordinary General Meeting held on 22 February 2005.
Given the uncertain sentiments in the Malaysian equity market prevailing then, the Company with the approval of the Securities
Commission (“SC”) had extended the completion of the proposed Rights Issue of IPS twice, fi rstly from 3 June 2005 to 31 December
2005 and subsequently from 1 January 2006 to 30 June 2006.
On 3 May 2006, the Company announced that after taking into consideration the then market sentiments and the market
performance of the ordinary shares of the Company, it has decided to abort the proposed Rights Issue of IPS.
Notwithstanding the abortion of the proposed Rights Issue of IPS, the Board of Directors of the Company on 3 May 2006
announced that the Company will proceed with the Proposed Bonus Issue of up to 152,177,000 new ordinary shares of RM1 each
as fully paid on the basis of one (1) Bonus Share for every one (1) existing ordinary share held to the registered shareholders of the
Company at the close of business on an entitlement date to be determined and announced later (“Proposed Bonus Issue”).
The Proposed Bonus Issue will be issued via capitalization of up to RM152,177,000 from the following:
(i) up to RM11,744,000 from share premium account of the Company; and
(ii) up to RM140,433,000 from retained earnings of the Company.
The Proposed Bonus Issue was approved by the shareholders of the Company at the Annual General Meeting held on 21 June
2006.
The Company had on 19 July 2006 submitted an Application for listing of additional ordinary shares to be issued pursuant to the
Proposed Bonus Issue to Bursa Malaysia Securities Berhad (“Bursa Securities”). The approval was obtained on 1 August 2006 from
Bursa Securities.
152,177,000 new ordinary shares of RM1 each were subsequently allotted on 8 September 2006 pursuant to the Proposed Bonus
Issue.
(b) On 2 May 2006, a new subsidiary company namely MAA Takaful Berhad (“MAA Takaful”) was incorporated with an authorised
share capital of RM150,000,000 comprising 150,000,000 ordinary shares of RM1 each of which RM2 have been issued and fully
paid-up.
MAA Takaful was incorporated pursuant to the approval of Bank Negara Malaysia (“BNM”) to carry on Takaful business in
Malaysia with joint venture partner, Solidarity Company BSC (C) (“Solidarity”).The equity participation of the Company and
Solidarity in MAA Takaful is 75% and 25% respectively.
The Company has subsequently on 21 September 2006 entered into a Subscription Agreement with Solidarity in respect of the
subscription of 100,000,000 shares of RM1 each (“Initial Shares”) in MAA Takaful by both parties within thirty (30) days from the
date of the Subscription Agreement or such other extended date as the parties may mutually agree.
The parties have also entered into a Shareholders’ Agreement to regularise their relationship as shareholders of MAA Takaful and
the conduct of the affairs of MAA Takaful. The Shareholders’ Agreement will take effect on the date the parties subscribe to their
respective shares in MAA Takaful.
MAA Takaful has on 16 November 2006 submitted an application to the SC for the increase in its paid up capital. The approval
was obtained from the SC on 15 January 2007.
161

Notes To The Financial Statements
- 31 December 2006 (continued)
46 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (continued)
(c) On 4 August 2006, the Company announced the Proposed Issuance of Commercial Papers (“CP”) and/or Medium Term Notes
(“MTN”) Programme of up to RM200 million (“Proposed Programme”).
The Proposed Programme will comprise the issuance of CP with tenors ranging from one (1) month to twelve (12) months and/or
MTN with tenors of more than one (1) year but not exceeding seven (7) years. The proceeds from the Proposed Programme will
be used in relation to fi nancing the Company’s investment in Takaful business, to repay certain existing bank borrowings of the
Company and its subsidiary companies, to fi nance redemption of its existing RM120 million Serial Fixed Rate Bonds maturing on
21 August 2007, to pre-fund the debt service reserve account to be established for the purposes of the Proposed Programme
and to fi nance working capital of the Company.
The approval for Proposed Programme was obtained on 28 August 2006 from Securities Commission (“SC”).
On 5 December 2006, the Company submitted an application to the SC for the following variations to the principal terms and
conditions of the Proposed Programme:
(i) to secure the issuance under the Proposed Programme by a bank gurantee facility from DBS Bank Lt, Labuan Branch (“DBS
Bank”) up to the maximum aggregate principal amount of the United States Dollars equivalent to RM200 million; and
(ii) to vary the utilisation of proceeds of the Proposed Programme, where among others the Company’s investment in Takaful
business will be fi nanced from internally generated fund
The SC has via its letter dated 22 December 2006 approved the above stated variations.
On 8 January 2007, the Company successfully issued RM200 million nominal amount of Medium Terms Notes up to a tenure of
5 years.
(d) On 22 September 2006, Columbus Capital Singapore Pte Ltd (“CCS”), a new wholly-owned subsidiary company of MAA
International Investment Ltd, which in turn is a wholly-owned subsidiary of the Company, entered into a conditional subscription
agreement with Columbus Capital Pty Limited (“CCPL”) to subscribe up to 20.0 million Series A Preference Shares at an issue
price of AUD1.00 each, representing up to 50% equity interest in CCPL for a total cash consideration of AUD20.0 million or RM57.0
million.
CCPL was incorporated in Australia under the Corporation Act 2001 on 4 May 2006.
CCS subscribed 15.0 million Series A Preference Shares in CCPL on 6 October 2006, representing 42.86% equity interest in CCPL.
(e) MAA International Assurance Ltd (“MAAIA”), a wholly-owned subsidiary company of MAA Corporation Sdn Bhd together with its
subsidiary company, Tuang Thai Co. Ltd had on 14 September 2006 entered into a Share Sale and Purchase Agreement with Mr.
Krisana Kritmanorote for the disposal of a total 4,799,800 ordinary shares of Thai Baht 10.00 each, representing the 42.15% equity
interest in MAAKK Wealth Management Co. Ltd (“MAAKK”), an associated company, for a total cash consideration of Thai Baht
47,998 (equivalent to approximately RM4,713) and the agreed repayment of Thai Baht 39,000,000 (equivalent to approximately
RM3,829,800) of the amount owing by MAAKK to MAAIA. The disposal was completed on 17 October 2006.
162

List Of Properties As At 31 December 2006
No. LOCATION OF PROPERTIES TENURE LAND/
BUILT-UP
AREA
(SQ.M)
DESCRIPTION/
EXISTING USE
APPROX.
AGE OF
BULDING
(YEAR)
NET BOOK
VALUE
(RM’000)
DATE OF
ACQUISITION
(A)/
REVALUATION (R)
1 Menara MAA, No. 15, Jalan Dato
Abdullah Tahir, 80300 Johor Bahru,
Johor Darul Takzim
Freehold 61,105 Offi ce building for
branch offi ce and
rental income
4 120,000 27-Feb-07 (R)
2 12 Units of Condominium, Tanjung
Puteri Condominium, No. 1, Jalan
Stulang Laut 2, Off Jalan Ibrahim
Sultan, Stulang Laut, 80300 Johor
Bahru, Johor Darul Takzim
Freehold 1,573 Condominiums
for rental income
10 3,220 09-Mar-06 (R)
3 HS(M) No. 622/96 PT No. 5365A, HS(M)
No. 623/96 PT No. 5366, HS(M) No.
626/96 PT No. 5369, Mukim Sungai
Seluang, Kedah Darul Aman
Freehold 534 Shop offi ce
under
construction
- 330 05-Feb-04 (R)
4 Lot 21, Jalan 4/32A,Kepong Industrial
Area, Batu 6 1/2 Kepong, 51200 Kuala
Lumpur
Leasehold
for 60 years
expiring on
05/01/2039
3,864 Industrial building
for rental income
3.7 6,600 24-Apr-06 (R)
5 1 Unit of Condominium, No. 403
Fernlea Court, 16, Persiaran Ampang
Hilir, 55000 Kuala Lumpur
Freehold 279 Condominiums
for rental income
6 1,187 22-Mar-07 (R)
6 11 Units of Bungalow lots at Hartamas
Heights, Sri Hartamas, Kuala Lumpur
Freehold 10,977 Vacant land - 22,137 01-Jun-05 (A)
7 Casa Rachado, Tanjung Biru, Batu
10, Jalan Pantai, 71250 Si-Rusa Port
Dickson, Negeri Sembilan Darul Khusus
Leasehold
for 99 years
expiring on
13/10/2036
14,414 Training resort for
staff and agency
11 12,000 24-Feb-04 (R)
8 Lot 1478, Nilai Industrial, Estate Phase
II, 71800 Nilai, Negeri Sembilan Darul
Khusus
Leasehold
for 99 years
expiring on
20/08/2089
5,853 Factory building
for rental income
10 6,400 24-Apr-06 (R)
9 No. 14 & 15, Jalan Toman 2, Kemayan
Square, 70200 Seremban, Negeri
Sembilan Darul Khusus
Freehold 14,922 Shophouses for
branch offi ce
9 4,200 07-Sep-06 (R)
10 21 Units of Shophouse, Kemayan
Square,70200 Seremban, Negeri
Sembilan Darul Khusus
Freehold
(parent title)
10,618 Shophouses for
rental income
8 11,600 26-Mar-07 (R)
11 21 Units of Shop Lots, Terminal One
Shopping Centre, 20B Jalan Lintang,
70000 Seremban, Negeri Sembilan
Darul Khusus
Freehold 3,646 Commercial lots
for rental income
8 12,478 09-Mar-06 (R)
12 CT4300, Lot 16, Section 22, Lot 16,
Town and District of Kuantan, Pahang
Darul Makmur
Freehold 4,040 Vacant land - 6,000 27-Mar-06 (R)
13 Lot 2638 S, Jalan Kampar, 30250 Ipoh,
Perak Darul Ridzuan
Freehold 2,076 Vacant land - 3,000 06-Mar-06 (R)
14 No. 12 ( Lot 35154), Off Jalan Chin
Choon Sam, No. 142 (35155), Jalan
Sultan Abdul Jalil, Ipoh, Perak Darul
Ridzuan
Freehold 4,846 Vacant land - 5,372 24-Mar-06 (R)
163

List Of Properties As At 31 December 2006 (continued)
No. LOCATION OF PROPERTIES TENURE LAND/
BUILT-UP
AREA
(SQ.M)
DESCRIPTION/
EXISTING USE
APPROX.
AGE OF
BULDING
(YEAR)
NET BOOK
VALUE
(RM’000)
DATE OF
ACQUISITION
(A)/
REVALUATION (R)
15 No. 28, Medan Silibin, 30300 Ipoh,
Perak Darul Ridzuan
Leasehold
for 99 years
expiring on
29/09/2098
2,381 Shophouses for
rental income
7 2,200 09-Jan-06 (R)
16 HS(D) 106957-106967, 106982-107005,
107008-107032 Mukim of Kampar,
District of Kinta, Perak Darul Ridzuan
Leasehold
for 99 years
expiring on
22/05/2101
8,584 Residential houses
for sale/rental
2 8,161 31-Dec-06 (R)
17 No. 19, 21, 23 & 25, Lebuh Kledang
Utara 2B, Taman Arkid, Menglembu,
Perak Darul Ridzuan
Leasehold
for 99 years
expiring on
17/09/2095
658 Shophouses for
rental income
2 1,100 10-Nov-06 (R)
18 Wisma MAA, No. 11-17, Jalan SM
1C/15, Fasa 1C 4, Bandar Baru Sri
Manjung 32040 Sri Manjung, Perak
Darul Ridzuan
Leasehold
for 99 years
expiring on
01/08/2079
3,924 Shophouses for
branch offi ce and
rental income
7 2,332 15-Apr-06 (R)
19 Menara MAA, No. 170, Jalan Argyll,
10250 Pulau Pinang
Freehold 23,103 Offi ce building for
branch offi ce and
rental income
7 34,500 27-Feb-07 (R)
20 Section 14, Bandar Georgetown,
Timur Laut Pulau Pinang :
Freehold 6,311 Land and Building
for Rental
-
13,396
27-Feb-07 (R)
Lot 497 and 502
Land for Rental
-
Lot 499
Building for Rental
77
-
Lot 501
Building for Rental
117
-
21 H.S(D) 14713, PT No. 2926 Mukim 11,
District of Seberang Prai Tengah State
of Pulau Pinang
Leasehold
for 60 years
expiring on
08/05/2052
10,849 Factory building
for rental income
16 11,213 28-Jan-05 (A)
22 Jalan Lintas, Kota Kinabalu, Sabah,
District of Kota Kinabulu, Sabah :
CL 015 017 679
Leasehold for
999 years
Lease expiring
on 16/04/2922
46,497 Residential houses
intended for
sales/rental
- 30,000 06-Jan-05 (R)
CL 015 019 217
Lease expiring
on 17/06/2924
CL 015 008 803
Lease expiring
on 20/04/2909
23 Lot No. 4/G3 to 4/G7, Api-Api Centre,
Jalan Centre Point, 88000 Kota
Kinabalu, Sabah
Leasehold
for 99 years
expiring on
31/08/2086
1,250 Shophouses for
rental income
12 3,750 17-Apr-06 (R)
24 Lot 11, General Industrial Zone
Package 1, Kota Kinabalu Industrial
Park KM 25, Jalan Tuaran, Kota
Kinabalu, Sabah
Leasehold
for 99 years
expiring on
21/12/2098
26,952 Vacant land - 3,770 24-Apr-06 (R)
164
25 Ground Floor to Third Floor, Wisma
Pendidikan, Jalan Balai Polis, 88850
Kota Kinabalu, Sabah
Leasehold
for 99 years
expiring on
31/12/2073
1,179 Offi ce building for
branch offi ce
24 3,500 29-Dec-06 (R)

List Of Properties As At 31 December 2006 (continued)
No. LOCATION OF PROPERTIES TENURE LAND/
BUILT-UP
AREA
(SQ.M)
DESCRIPTION/
EXISTING USE
APPROX.
AGE OF
BULDING
(YEAR)
NET BOOK
VALUE
(RM’000)
DATE OF
ACQUISITION
(A)/
REVALUATION (R)
26 2 Units bungalow lot (land) in town no.
01754486 & 017544875 at Sembulan,
Kota Kinabalu, Sabah
Leasehold
for 99 years
expiring on
31/12/2091
2,717 Vacant land - 2,462 07-Sep-05 (A)
27 Provisional lease 106261205, District
of Tawau, Along KM 13 Jalan
ApasTawau, Sabah
Leasehold
for 99 years
expiring on
10/04/2060
1,235,546 Vacant land - 25,951 07-Aug-06 (R)
28 Menara MAA, Lot 86, Section 53,
Jalan Ban Hock, 93100 Kuching,
Sarawak
Leasehold
for 99 years
expiring on
28/04/2051
2,598 Offi ce building for
branch offi ce
10 10,346 18-Oct-06 (R)
29 HS(M) 6690, PT 129 , Mukim
Damansara, District of Petaling Jaya,
State of Selangor (Kelana Jaya)
Leasehold
for 99 years
expiring on
28/01/2092
6,988 Vacant land - 6,390 02-Jan-04 (R)
30 43 Units of Condominiums, Tiara
Kelana Condominum, Jalan SS7/19,
Taman Sri Kelana, Kelana Jaya, 47301
Petaling Jaya, Selangor Darul Ehsan
Leasehold
for 99 years
expiring on
28/01/2092
8,569 Condominiums
for rental income
10 12,300 09-Mar-06 (R)
31 Millennium Court, Lots PT 1, 2, 2A, 3, 4,
5, 6, 9 & 50, Section 16, Lorong Ilmu,
Petaling Jaya,Selangor Darul Ehsan
Leasehold
for 99 years
expiring on
11/03/2068
13,016 Hostel for rental
income
4 52,500 08-Sep-06 (R)
32 No. 11, Jalan SS 8/4, Sungai Way Free
Industrial Zone, 47300 Petaling Jaya,
Selangor Darul Ehsan
Freehold 6,743 Factory building
for rental income
18 8,000 12-Feb-04 (R)
33 Lot 34, Jalan Delima 1/3, Subang Hi-
Tech Industrial Park, 40000 Shah Alam,
Selangor Darul Ehsan
Freehold 3,106 Factory building
for rental income
9 5,500 04-Sep-06 (R)
34 No. 2, Jalan PPU 1, Taman
Perindustrian Puchong Utama, 47100
Puchong, Selangor Darul Ehsan
(PT. No. 32333)
Freehold 28,302 Industrial building
for rental income
4.5 38,500 06-Apr-06 (R)
35 No. 23, Rawang Industrial Park, 48000
Rawang, Selangor Darul Ehsan
Freehold 8,094 Industrial building
for rental income
6 10,000 06-Apr-06 (R)
36 5 Units of Condominium, Sinaran
Ukay Condominium, Jalan BU 1/1,
Taman Bukit Utama, 68000 Bukit
Antarabangsa, Ampang, Selangor
Darul Ehsan
Leasehold
for 99 years
expiring on
03/08/2098
12,128 Condominiums
for rental income
9 957 05-Jan-04 (R)
37 EMR 6095, PT 2981 & EMR 6096, PT
2982, Mukim Setapak, District of
Gombak, State of Selangor
Freehold 15,609 Vacant land - 1,246 02-Jan-04 (R)
38 HS(M) 10339/PT No. 14251, HS(D)
24220/PT No. 14250, Mukim of Ulu
Kelang, District of Gombak, State of
Selangor
Freehold 249,449 Vacant land - 163,410 28-May-04 (A)
165

List Of Properties As At 31 December 2006 (continued)
No. LOCATION OF PROPERTIES TENURE LAND/
BUILT-UP
AREA
(SQ.M)
DESCRIPTION/
EXISTING USE
APPROX.
AGE OF
BULDING
(YEAR)
NET BOOK
VALUE
(RM’000)
DATE OF
ACQUISITION
(A)/
REVALUATION (R)
39 Geran 23827 Lot 2718, Mukim Kajang,
District Hulu Langat
Freehold 77,168 Vacant land - 7,264 22-Mar-07 (R)
40 Plot 57 H.S (M) 3505, PT 7198 & Plot
58 H.S (M) 3504, PT 7197, Mukim Bukit
Raja Daerah Petaling,
Selangor Darul Ehsan
Leasehold
for 99 years
expiring on
28/01/2103
1,924 Vacant land - 2,525 20-Jan-05 (A)
41 PT 1606 Jalan Kota, Mukim Bandar
Kelang, Selangor Darul Ehsan
Leasehold
for 99 years
expiring on
07/11/2104
124,811 Vacant land - 22,668 26-Jan-06 (A)
42 58 Units of Bangsar Suria
Condominium
Freehold 10,977 Condominiums
for sale
- 31,000 30-Aug-06 (R)
43 1 Unit of Tiara Kelana Condominium
Taman Sri Kelana Petaling Jaya
Selangor Darul Ehsan
Leasehold
for 99 years
expiring on
01/08/2092
596 Condominiums
for rental/sale
10 483 20-Feb-04 (R)
44 Flat 9, 19-23 Palace Court London
W2LP
Leasehold
for 999 years
expiring on
30/09/2995
135 Apartment for
use by selected
corporate clients
10 5,937 10-Mar-05 (R)
45 Desa Ungasan, Kecamatan Kuta
Selatan Kabupaten Badung, Bali
Province Republic of Indonesia
Leasehold for
20 years
expiring on
2024
1,860 Vacant land - 1,284 16-Apr-06 (R)
46 Wisma MAA, No. 21-5,21-6, Jalan
Zabedah, 83000 Batu Pahat, Johor
Darul Takzim
Freehold 1,217 Shophouses for
branch offi ce
8 1,480 24-Apr-06 (R)
47 Wisma MAA, No. 11A & 15, Jalan Syed
Abdul Hamid Sagaff, 86000 Kluang,
Johor Darul Takzim
Leasehold
for 99 years
expiring on
2093
1,048 Shophouses for
branch offi ce
10 1,529 17-Apr-06 (R)
48 Bangunan Wira Security, No. 183,
Jalan Ipoh, 51200 Kuala Lumpur
Freehold 5,290 Offi ce building for
rental income
45 15,000 27-Feb-06 (R)
49 Wisma MAA, No.34, Jalan Bakri, 84000
Muar, Johor Darul Takzim
Freehold 1,569 Offi ce building for
branch offi ce
23 1,772 06-Jan-06 (R)
50 Wisma MAA, No.1, 2, 3 & 4, Jalan
Emas, Taman Batu Hampar, 85000
Segamat, Johor Darul Takzim
Freehold 2,362 Shophouses for
branch offi ce and
rental income
10 3,092 17-Apr-06 (R)
51 No.18-E, Jalan Raya, 08300 Gurun,
Kedah Darul Aman
Freehold 446 Shophouses for
branch offi ce and
rental income
13 285 17-Apr-06 (R)
52 Wisma MAA, No. 117 & 118, Jalan
Pengkalan, Taman Pekan Baru, 08000
Sungai Petani, Kedah Darul Aman
Leasehold
for 99 years
expiring on
19/12/2091
1,570 Shophouses for
branch offi ce
11 1,043 12-Jan-06 (R)
166

List Of Properties As At 31 December 2006 (continued)
No. LOCATION OF PROPERTIES TENURE LAND/
BUILT-UP
AREA
(SQ.M)
DESCRIPTION/
EXISTING USE
APPROX.
AGE OF
BULDING
(YEAR)
NET BOOK
VALUE
(RM’000)
DATE OF
ACQUISITION
(A)/
REVALUATION (R)
53 Menara MAA, No. 12, Jalan Dewan
Bahasa, 50460 Kuala Lumpur
Freehold 71,793 Offi ce building
for head offi ce
use and rental
income
7 241,000 25-Apr-06 (R)
54 Wisma MAA, No.185 to 190, Taman
Melaka Raya, 75000 Melaka
Leasehold
for 99 years
expiring on
19/08/2075
2,764 Shophouses for
branch offi ce and
rental income
15 2,511 04-Jan-06 (R)
55 PT 1561, Kawasan Perusahaan Nilai,
71800 Nilai, Negeri Sembilan Darul
Khusus
Leasehold
for 60 years
expiring on
05/11/2050
3,902 Factory building
for rental income
16 3,977 24-Apr-06 (R)
56 22-Storey Offi ce Tower, Terminal One
Commerce Centre, Lot 5318, Jalan
Lintang, 70000 Seremban, Negeri
Sembilan Darul Khusus
Freehold 15,003 Offi ce building for
rental income
1.3 30,000 27-Feb-07 (R)
57 Wisma MAA, No. A1, Jalan Stadium,
25200 Kuantan, Pahang Darul
Makmur
Freehold 721 Shophouses for
branch offi ce
16 868 13-Jan-06 (R)
58 Wisma MAA, No. 65, Persiaran
Greenhill, 30450 Ipoh, Perak Darul
Ridzuan
Leasehold
for 999 years
expiring on
21/09/2894
3,281 Offi ce building for
branch offi ce
10 7,030 09-Jan-06 (R)
59 No.10, Jalan Sena Indah 1, Taman
Sena Indah, 01000 Kangar, Perlis Indera
Kayangan
Leasehold
for 99 years
expiring on
02/10/2094
240 Shophouses for
branch offi ce
8 206 19-Apr-06 (R)
60 Wisma MAA, No. 7126 - 7128, Jalan
Bagan Jermal, Taman Bintang,12300
Butterworth, Pulau Pinang
Freehold 1,625 Shophouses for
branch offi ce
7 1,925 13-Jan-06 (R)
61 Wisma MAA, TB224, Town Extension II,
91000 Tawau, Sabah
Leasehold
for 999 years
expiring on
01/01/2896
3,976 Offi ce building for
branch offi ce and
rental income
17 3,542 24-Apr-06 (R)
62 Wisma MAA,No. 14, 16, 18, 20, 22 & 24,
Jalan SS 3/5, Taman Sentosa, 47300
Petaling Jaya, Selangor Darul Ehsan
Freehold 2,520 Shophouses for
branch offi ce and
rental income
34 6,796 24-Apr-06 (R)
63 Wisma MAA, No. 77, 79, 81, 83, 85, 87 &
89, Lorong Tiong, Taman Orkid, 41050
Klang, Selangor Darul Ehsan
Freehold 3,747 Shophouses for
branch offi ce and
rental income
10 5,849 09-Jan-06 (R)
64 Wisma MAA, No.134, Jalan Sultan
Zainal Abidin, 20000 Kuala Terengganu,
Terengganu Darul Iman
Freehold 1,343 Offi ce building for
branch offi ce
29 2,021 02-May-06 (R)
1,067,095
167

List Of Substantial Shareholders And
Directors’ Shareholdings As At 18 May 2007
SUBSTANTIAL SHAREHOLDERS
Name No. of shares held % of issued capital
Tunku Tan Sri Abdullah ibni Almarhum Tuanku Abdul Rahman
Indirect Interest 103,778,684 34.10
Tunku Dato’ Seri Iskandar bin Tunku Tan Sri Abdullah
Indirect Interest 103,778,684 34.10
Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah
Indirect Interest 103,778,684 34.10
Tunku Dato’ Ya’acob bin Tunku Tan Sri Abdullah
Direct Interest 1,237,500 0.41
Indirect Interest 103,778,684 34.10
Iternum Melewar Sdn Bhd
Indirect Interest 103,778,684 34.10+
Khyra Legacy Berhad
Indirect Interest 103,778,684 34.10#
DIRECTORS’ SHAREHOLDINGS
Number of Shares Held
Name Direct % Indirect %
Tunku Tan Sri Abdullah ibni Almarhum Tuanku Abdul Rahman - - 103,778,684 34.10*
Tunku Dato’ Seri Iskandar bin Tunku Tan Sri Abdullah - - 103,778,684 34.10*
Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah - - 103,778,684 34.10*
Tunku Dato’ Ya’acob bin Tunku Tan Sri Abdullah 1,237,500 0.41 103,778,684 34.10*
Yeo Took Keat 80,000 ^ - -
Tan Sri Ahmad bin Mohd Don 830,000 0.28 - -
Datuk Ramlan bin Abdul Rashid 6,666 ^ - -
Notes:
+ Iternum Melewar Sdn Bhd (“IMSB”) is deemed interested in MAAH by virtue of it being the holding company of Melewar Equities Sdn
Bhd (“MESB”) who in turn is the holding company of Melewar Khyra Sdn Bhd (“MKSB”). MESB and MKSB are substantial shareholders of
MAAH.
# Khyra Legacy Berhad is deemed interested in MAAH by virtue of it being the ultimate holding company of IMSB.
* Deemed interested by virtue of Section 6A(4) of the Companies Act 1965, held through IMSB, a company in which the above mentioned
Directors have an interest.
^ Negligible
168

Statistics Of Shareholdings
As At 18 May 2007
Authorised Capital
RM500,000,000
Issued and Paid-up Capital
RM304,353,752
Class of Shares
Ordinary Shares of RM1.00 each
Total Number of Shares Issued 304,353,752
Number of Shareholders 5,999
Breakdown of shareholdings
Size of holdings No. of holders % of holders No. of shares % of shares
1-99 187 3.12 7,465 0.00
100 – 1,000 923 15.39 724,384 0.24
1,001 – 10,000 3,643 60.73 15,754,597 5.18
10,001 – 100,000 1,091 18.19 29,112,350 9.57
100,000 and below 5% 151 2.52 168,448,612 55.35
5% and above 4 0.07 90,306,344 29.67
5,999 100.00 304,353,752 100.00
List of Top Thirty Shareholders
Name No. of shares held % of issued capital
1. AMSEC Nominees (Tempatan) Sdn Bhd
Benefi ciary: AmBank (M) Berhad for Melewar Equities Sdn Bhd 27,666,666 9.09
2. Merchant Nominees (Tempatan) Sdn Bhd
Benefi ciary: Pledged securities account for Melewar Khyra Sdn Bhd 22,000,000 7.23
3. Amanah Raya Nominees (Tempatan) Sdn Bhd
Benefi ciary: Skim Amanah Saham Bumiputera 21,768,400 7.15
4. HDM Nominees (Asing) Sdn Bhd
Benefi ciary: UOB Kay Hian Pte Ltd for Melewar Equities (BVI) Ltd 18,871,278 6.20
5. Melewar Equities Sdn Bhd 14,513,030 4.77
6. Citigroup Nominees (Asing) Sdn Bhd
Benefi ciary: Bear Stearns Securities Corp for Third Avenue Global Value Fund LP 12,148,800 3.99
7. HSBC Nominees (Asing) Sdn Bhd
Benefi ciary: RBC Dist for Melewar Equities (BVI) Limited 10,966,666 3.60
8. Employees Provident Fund Board 8,946,934 2.94
9. HSBC Nominees (Asing) Sdn Bhd
Benefi ciary: Exempt An for J.P. Morgan Bank (Ireland) Public Limited Company 7,962,600 2.62
10. Amanah Raya Nominees (Tempatan) Sdn Bhd
Benefi ciary: Amanah Saham Wawasan 2020 6,920,400 2.27
11. Citigroup Nominees (Asing) Sdn Bhd
Benefi ciary: UBS AG for the Blackhorse Emerging Enterprises Master Fund 6,697,300 2.20
12. HSBC Nominees (Asing) Sdn Bhd
Benefi ciary: TNTC for Atlantis Asian Recovery Fund Plc 6,336,700 2.08
13. Amanah Raya Nominees (Tempatan) Sdn Bhd
Benefi ciary: Amanah Saham Malaysia 5,990,800 1.97
14. Lembaga Tabung Angkatan Tentera 5,866,666 1.93
15. OSK Nominees (Tempatan) Sdn Bhd
Benefi ciary: Pledged securities account for Melewar Khyra Sdn Bhd 5,000,000 1.64
16. Melewar Khyra Sdn Bhd 4,761,044 1.56
17. Amanah Raya Nominees (Tempatan) Sdn Bhd
Benefi ciary: Sekim Amanah Saham Nasional 3,938,400 1.29
169

Statistics Of Shareholdings
As At 18 May 2007 (continued)
Name No. of shares held % of issued capital
18. Cartaban Nominees (Asing) Sdn Bhd
Benefi ciary: Government of Singapore Investment Corporation Pte Ltd for
Government of Singapore (C) 3,550,800 1.17
19. Citigroup Nominees (Asing) Sdn Bhd
Benefi ciary: GSI for the Blackhorse Asia Master Fund 2,736,900 0.90
20. HSBC Nominees (Asing) Sdn Bhd
Benefi ciary: UBS AG Zurich for LGT Capital Management Ltd 2,506,500 0.82
21. Citigroup Nominees (Asing) Sdn Bhd
Benefi ciary: GSI for Altma Fund Sicav P.L.C. 2,096,800 0.69
22. Lee Kek Ming 2,010,000 0.66
23. Cartaban Nominees (Tempatan) Sdn Bhd
Benefi ciary: MIDF Amanah Asset Nominees (Tempatan) Sdn Bhd for
Employees Provident Fund Board (JF404) 1,967,400 0.65
24. HSBC Nominees (Asing) Sdn Bhd
Benefi ciary: Exempt an for The HongKong and Shanghai Banking
Corporation Limited (HBFS-I CLT ACCT) 1,700,400 0.56
25. HSBC Nominees (Asing) Sdn Bhd
Benefi ciary: TNTC for Atlantis Asian Opportunities Fund (ATL INT UMB FD) 1,700,000 0.56
26. Cartaban Nominees (Asing) Sdn Bhd
Benefi ciary: Government of Singapore Investment Corporation Pte Ltd for
Monetary Authority of Singapore (H) 1,600,200 0.53
27. HSBC Nominees (Asing) Sdn Bhd
Benefi ciary: TNTC for Atlantis Asian Special Situations Fund (ATL INT UMB FD) 1,440,000 0.47
28. Amanah Raya Nominees (Tempatan) Sdn Bhd
Benefi ciary: Amanah Saham Nasional 2 1,408,000 0.46
29. MAA Bancwell Trustee Berhad
Benefi ciary: As benefi cial owner 1,261,400 0.41
30. Tunku Dato’ Ya’acob Bin Tunku Tan Sri Abdullah 1,237,500 0.41
215,571,584 70.83
170

NOTICE
There will be
no distribution
of door gifts
FORM OF PROXY
(please refer to the notes below)
No. of ordinary shares held
I/We, NRIC No./Co. No./CDS No. :
(Full Name in block letters)
of
(Full address)
being a member/members of MAA HOLDINGS BERHAD hereby appoint the following persons(s) :-
Name of proxy, NRIC No. & Address
1.
No. of shares to be represented by proxy
2.
or failing him / her, the Chairman of the Meeting as my / our proxy to vote for me/us and my / our behalf at the Ninth Annual General Meeting
of the Company to be held at the Auditorium, Podium 1, Menara MAA, No. 12 Jalan Dewan Bahasa, 50460 Kuala Lumpur on Thursday, 28
June 2007 at 10.00 a.m. My / our proxy is to vote as indicated below : -
Resolution 1
To approve the payment of a fi rst and fi nal tax-exempt dividend of 2% in respect of
the fi nancial year ended 31 December 2006.
Resolution 2 To approve the increase of the Non-Executive Directors’ fees commencing from 1
January 2007.
Resolution 3 To approve the payment of Directors’ fees in respect of the fi nancial year ending 31
December 2007 to be payable quarterly in arrears.
Resolution 4 To re-elect Dato’ Iskandar Michael bin Abdullah who is retiring pursuant to Article 73
of the Company’s Articles of Association.
Resolution 5
Resolution 6
Resolution 7
Resolution 8
Resolution 9
Resolution 10
Resolution 11
Resolution 12
Resolution 13
Resolution 14
Resolution 15
Resolution 16
To re-elect the following Directors of the Company who are retiring pursuant to
Article 79 of the Company’s Articles of Association :-
(i) Datuk Razman Md Hashim bin Che Din Md Hashim
(ii) Muhamad Umar Swift
(iii) Datuk Ramlan bin Abdul Rashid
(iv) Tan Sri Ahmad bin Mohd Don
(v) Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah
To re-appoint the following directors who are retiring pursuant to Section 129(6) of
the Companies Act 1965: -
Tunku Tan Sri Abdullah Ibni Almarhum Tuanku Abdul Rahman
Major General Lai Chung Wah (Rtd)
To re-appoint Messrs. PricewaterhouseCoopers as Auditors of the Company and to
authorise the Directors to fi x their remuneration.
To authorise the Directors to allot and issue shares in the Company pursuant to S132D
of the Companies Act 1965.
To authorise the renewal of share buy-back authority.
To approve the Shareholders’ Mandate for Recurrent Related Party Transactions.
To approve the amendments to Articles of Association of the Company.
FIRST PROXY
SECOND PROXY
For Againts For Againts
(Please indicate with a “√” or “X” in the space provided how you wish your vote to be cast. If no instruction as to voting is given, the proxy will vote or abstain from voting at his/her
discretion).
Dated this day of 2007
NOTES: -
1. A member entitled to attend and vote at a meeting of the Company is entitled to appoint a proxy to attend
and vote in his stead. A proxy may but need not be a member of the Company.
2. A member of the Company who is an authorised nominee as defi ned under the Securities Industry (Central
Depositories) Act 1991, may appoint one (1) proxy in respect of each securities account.
3. The instrument appointing a proxy, shall be in writing under the hand of the appointer or his attorney duly
authorised in writing, and in the case of a corporation, either under seal or under hand of an offi cer or
attorney duly authorised.
4. The instrument appointing a proxy must be deposited at the Company’s Registered Offi ce, Suite 20.03, 20th
Floor, Menara MAA, No.12, Jalan Dewan Bahasa, 50460 Kuala Lumpur, not less than 48 hours before the time
appointed for holding the meeting or any adjournment thereof.
5. Any alteration in the form of proxy must be initialed.
6. Explanatory notes to Special Business of the Agenda 9 : -
(a) Authority to allot and issue shares in general pursuant to Section 132D of the Companies Act,
1965.
This resolution is proposed pursuant to Section 132D of the Companies Act, 1965, and if passed, will give
the Directors of the Company, from the date of the above Annual General Meeting, authority to issue
and allot shares from the unissued share capital of the Company for such purposes as the Directors deem
fi t and in the interest of the Company. This authority, unless revoked or varied at a general meeting, will
expire at the conclusion of the next Annual General Meeting of the Company.
Signature/Common Seal
(b) Proposed Renewal of authority for the Company to purchase its own shares
The proposed Resolution 14, if passed, would empower the Directors to exercise the power of the
Company to purchase its own shares (“the Proposal”) by utilising its fi nancial resources not immediately
required. The Proposal may have a positive impact on the market price of the Company’s shares. This
authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next AGM
of the Company.
(a) Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a
Revenue or Trading Nature (“RRPTs”)
The Proposed Resolution 15, if passed, will empower the Company to conduct recurrent related
party transactions of a revenue or trading nature which are necessary for the Group’s day-to-day
operations, and will eliminate the need to convene separate general meetings from time to time to seek
shareholders’ approval. This will substantially reduce administrative time, inconvenience and expenses
associated with the convening of such meetings, without compromising the corporate objectives of the
Group or adversely affecting the business opportunities available to the Group.
The detailed information on Recurrent Related Party Transactions is set out in Part B of the Circular dated
30 May 2006 which is dispatched together with this Annual Report.
(d) Proposed Amendments to Articles of Association of the Company
The Proposed Special Resolution 16, if passed, will update the Articles of Association of the Company to
ensure continues compliance with the Listing Requirements of Bursa Securities and to further enhance
the administration of the internal affairs of the Company.

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S T A M P
The Secretary
MAA HOLDINGS BERHAD
Suite 20.03, 20th Floor, Menara MAA
No. 12, Jalan Dewan Bahasa
50460 Kuala Lumpur
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Notice
There will be no distribution of door gifts.